BMO Capital has lowered its price target on Progressive Corp. (PGR) to $232 from $239, while leaving its rating at Market Perform. The research note from the firm pointed to an ongoing deceleration in Progressive's business, although the analyst writing the update indicated that the worst of the top-line slowdown relative to consensus forecasts appears to be behind the insurer.
Progressive is currently trading around $215 and carries a price-to-earnings ratio of 11.71. InvestingPro Fair Value metrics identify the shares as undervalued at current levels.
The research briefing emphasized Progressive's recent operational momentum, including revenue growth of 18.35% over the past twelve months. BMO expects the company to continue slowing from that pace, but does not anticipate divergence that would be materially different from prevailing market expectations.
Among specific near-term pressures, BMO highlighted an 8% rate reduction implemented by Progressive in Florida. The firm suggested that the cut could weigh on results in the near term. Offsetting dynamics, according to BMO, may include increased sales seasonality driven by tax refund flows for some consumers - an effect the note characterized as "a mild positive" because lower-income consumers are not expected to see gains from that seasonal boost.
Progressive also reported notable growth in policy counts late in the year. In December the company added 211,000 net new policies, a result that exceeded both BofA Securities' projection of zero net growth and consensus estimates ranging from 66,000 to 121,000 policies. BofA responded to the stronger policy-in-force numbers by raising its price target on Progressive to $334 while maintaining a Buy rating.
Market views remain mixed. Morgan Stanley, while acknowledging robust auto policy expansion in a difficult environment, reiterated an Underweight stance with a $214 price target.
On the leadership front, Progressive announced a planned CFO transition. John Sauerland will retire in 2026 after 35 years with the company. Andrew Quigg, the firm's current Chief Strategy Officer, has been named his successor and a transition period is planned.
Product development at Progressive also advanced with the introduction of a pet insurance offering for cats and dogs. The new coverage is being rolled out in 43 states and the District of Columbia, designed to cover unexpected veterinary expenses. The announcement noted average premiums of $47 per month for the pet policies.
The combination of the BMO price-target reduction, divergent broker reactions to policy growth, the Florida rate cut, the upcoming CFO succession and the new pet insurance product frames a mixed operational and strategic picture for Progressive as it navigates decelerating growth and near-term pricing pressures.