UPDATE: Morgan Stanley Downgrades Progressive

According to a research report published this morning, Morgan Stanley has downgraded Progressive

to Underweight. In the report, Morgan Stanley commented, "PGR is well managed, but the stock's premium valuation implies superior EPS growth and returns. The EPS CAGR has been just 1% since 2003 and we see limited EPS growth in 2012-13 as margin pressure drives our EPS 5% below consensus. Our base case is $18, offering a risk-return skewed to the downside." Progressive closed yesterday at $21.25.