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Valued at a market cap of $142.5 billion, The Progressive Corporation (PGR) is an insurance company based in Mayfield Village, Ohio. It primarily writes insurance for personal autos and special lines products, including motorcycles, RVs, and watercraft, as well as individual residential property insurance for homeowners and renters.
This property and casualty insurance giant has underperformed the broader market over the past 52 weeks. PGR has gained 12.1% over this time frame, while the broader S&P 500 Index ($SPX) has surged 19%. Moreover, on a YTD basis, the stock is up 4%, compared to SPX’s 10% return.
Narrowing the focus, PGR has also lagged behind the Invesco KBW Property & Casualty Insurance ETF’s (KBWP) 13.3% uptick over the past 52 weeks and 4.2% rise on a YTD basis.
On Aug. 4, shares of PGR closed up marginally after its Q2 earnings release. The company reported total revenue of $22 billion, representing a 21.3% increase from the year-ago quarter, with net premiums earned up by 18% and investment income up by 27.2% annually. Furthermore, this robust top-line growth also contributed to a notable 117.7% year-over-year rise in its net income to $5.40 per share.
For the current fiscal year, ending in December, analysts expect PGR’s EPS to grow 24.4% year over year to $17.48. The company’s earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the 21 analysts covering the stock, the consensus rating is a "Moderate Buy” which is based on 10 “Strong Buy,” two "Moderate Buy,” and nine “Hold” ratings.
This configuration is slightly less bullish than a month ago, with 11 analysts suggesting a “Strong Buy” rating.
On Aug. 13, Citigroup Inc. (C) initiated a “Buy" rating on PGR and set a price target of $312, implying a 25.2% potential upside from the current levels.
The mean price target of $293.61 represents a 17.8% premium from PGR’s current price levels, while the Street-high price target of $339 suggests an ambitious upside potential of 36%.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
