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Investing.com - Morgan Stanley reiterated an Underweight rating on Progressive Corp. (NYSE:PGR) with a $190.00 price target. The stock currently trades at $198.16, near its 52-week low of $192.02, yet InvestingPro data suggests the company may be undervalued with a Fair Value estimate significantly above current levels.
The firm said results were generally steady, though net written premium growth was elevated by about 3 percentage points due to calendar adjustments. The combined ratio and buybacks should continue to support the stock.
Morgan Stanley noted the attritional loss ratio, premium growth after adjustments for monthly closing, and auto policies in force adds for the month were somewhat disappointing. March should be a strong growth month seasonally, and the sequential deceleration in policies in force growth came as a surprise.
The firm said headline results were better than consensus earnings per share, but underlying line items invite more questions. Slower policies in force for the month with calendar adjustments on net premiums written obscures the path for growth.
Morgan Stanley said it will focus on how quickly the combined ratio can normalize higher, with inflation remaining a concern and competition heating up. The firm said its thesis centers on earnings per share compression into 2027. This aligns with data showing EPS is forecast to decline from $19.23 in the last twelve months to $16.28 for fiscal 2026. Still, 16 analysts have recently revised their earnings upwards, according to InvestingPro Tips, which offers deeper insights through comprehensive Pro Research Reports available for PGR and over 1,400 US equities.
In other recent news, The Progressive Corporation reported a 6% increase in net premiums written for the first quarter of 2026, totaling $23.64 billion compared to $22.21 billion in the same period last year. The company’s net income rose by 10% to $2.82 billion, with earnings per share for common shareholders increasing to $4.80 from $4.37. Barclays reiterated its Overweight rating on Progressive with a price target of $247, maintaining a positive outlook on the company. Meanwhile, BofA Securities adjusted its price target to $295 from $305, while maintaining a Buy rating, citing anticipated growth in policy counts. Jefferies lowered its price target slightly to $215, maintaining a Hold rating, due to adjustments in auto pricing and projections for net investment income. Barclays also revised its price target to $247 from $265, maintaining an Equalweight rating, following adjustments to its earnings per share forecasts for 2026 and 2027. These developments highlight ongoing evaluations and adjustments by analysts in response to Progressive’s financial performance and market conditions.
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