KBW raises price target for Progressive Corp to $280 By Investing.com

On Friday, Keefe, Bruyette & Woods (KBW) updated its rating for Progressive Corp (NYSE:) and raised the stock’s price target from $275 to $280. ​​The “Outperform” rating on the insurance company’s shares was maintained.

The adjustment followed Progressive’s earnings report for August 2024. KBW’s analysis of the report and market conditions led to an increase in estimated earnings per share (EPS) for 2024, 2025 and 2026. EPS forecasts were revised upward to $13.35, $12.30 and $13.65, from $12.55, $12.15 and $13.60 previously.

The new price target of $280 is based on 22.8 times the updated 2025 EPS estimate and 20.5 times the 2026 EPS estimate. This valuation reflects the firm’s confidence in Progressive’s financial performance and growth prospects more broadly.

The revised EPS estimates take into account the company’s outperformance in August 2024. The KBW analyst also expects faster growth in policies (PIF) and premiums. In addition, lower core loss ratios are expected, which could indicate improved profitability in the insurance business.

However, the updated analysis is not without concerns. The analyst believes that these positive factors could be partially offset by higher expense ratios and lower net investment income (NII). Despite these potential headwinds, the overall outlook for Progressive remains positive, as reflected in the “outperform” rating and increased price target.

In other recent news, Progressive Corp. reported strong financial results, with operating earnings of $1.45 per share, beating estimates of $0.78. The company’s net income reached $935.3 million, on net written premiums of $6.5 billion. Private auto policy numbers increased 14.8% year-over-year and 1.8% quarter-over-quarter.

Wells Fargo maintained an “Overweight” rating on Progressive shares, citing the company’s consistent advertising and policing growth. Barclays added an “Equal Weight” rating to the stock, recognizing the company’s growth potential amid market challenges. BofA Securities reiterated a “Buy” rating on Progressive shares after an exceptionally strong operating month.

Progressive also announced leadership changes: Vice President and Chief Accounting Officer Mariann Wojtkun Marshall will retire in mid-2025, and board member Danelle M. Barrett is stepping down for health reasons.

InvestingPro Insights

As Progressive Corp (NYSE:PGR) draws attention with its revised earnings forecast and increased price target from Keefe, Bruyette & Woods, insights from InvestingPro enrich the perspective for investors considering the stock. With a market capitalization of $149.09 billion, Progressive is a major player in the insurance sector. The company’s price-to-earnings (P/E) ratio, a common valuation metric, currently stands at 21.84, which equates to an adjusted P/E ratio for the trailing twelve months to Q2 2024 of 21.8.

InvestingPro Tips highlights that 15 analysts have upgraded their earnings forecasts for Progressive for the coming period, indicating positive sentiment in the market. In addition, Progressive’s robust revenue growth of 21.33% over the trailing twelve months to Q2 2024 demonstrates the company’s ability to expand effectively in a competitive industry.

Another important metric, the price-to-book ratio (P/B) is 6.41 over the last twelve months, suggesting that the stock may be trading at a premium to its book value. This could reflect the market’s confidence in Progressive’s future growth prospects. Additionally, Progressive has paid dividends for 15 consecutive years, underscoring the company’s commitment to creating shareholder value.

For investors seeking a more comprehensive analysis, additional InvestingPro Tips are available that dive deeper into the company’s financial health and market performance. These insights can provide a more nuanced understanding of Progressive’s position within the insurance industry.

To explore these additional InvestingPro Tips and get an in-depth perspective on Progressive Corp, interested readers can visit.

This translation was generated using artificial intelligence. For more information, please see our Terms of Use.