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UPDATE: Progressive No Longer Sell At Deutsche Bank

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Progressive (NYSE: PGR) is no longer a Sell, according to analysts at Deutsche Bank who upgraded the company to Neutral.

The primary reason for the upgrade is that underwriting expenses have not risen as expected: “Our model assumed a return to a 21% expense ratio, Progressive's expense load stands at 20.3% and may even be improving.”

Commenting on EPS growth, which has been faster than previously expected, the note states, “We tend to believe that the outlook for Progressive’s earnings growth is not a robust one. Between GEICO’s economy of scale advantage, Progressive’s low policy-life expectancy and the leveling of the playing field against incumbents for agency-sourced business, Progressive’s underwriting earnings growth rate seems challenged. Concerns over the long-term value of Progressive being eroded by the advent of the driverless car is an additional reason for investor
concern.”

Deutsche Bank put a $24 price target on Progressive, based on the S&P 500’s forward PE and a 25 percent discount to investment income.

Latest Ratings for PGR

DateFirmActionFromTo
Mar 2019Credit SuisseMaintainsOutperformOutperform
Feb 2019CitigroupMaintainsNeutralNeutral
Jan 2019BarclaysUpgradesUnderweightOverweight

View More Analyst Ratings for PGR
View the Latest Analyst Ratings

Posted-In: Deutsche BankUpgrades Price Target Analyst Ratings

 

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