BofA raises Progressive stock price target to $312 on buybacks

Investing.com - BofA Securities raised its price target on Progressive Corp. (NYSE:PGR) to $312 from $298 while maintaining a Buy rating on the insurance company’s shares.

The firm’s March results came in at $1.55 per share, below BofA’s forecast of $1.62 but in line with or ahead of consensus estimates. The in-period loss ratio ran above the firm’s forecast, while net prior-period development came in better than expected. The company delivered diluted EPS of $19.23 over the last twelve months, while trading at a P/E ratio of 10.44—notably low for a company with 16% revenue growth.

Progressive’s expense ratio fell to 20.0% in March from 20.6% to 20.9% in January and February. BofA said the decline may signal moderation in advertising spending or a benefit as the company’s employee headcount stagnates or declines.

BofA lowered its fiscal 2026 full-year forecast based on the March numbers but raised its out-year forecasts by 10 cents each due to a slightly higher projection of share repurchases at a slightly lower price. The firm’s 2028 forecast stands at $19.40 per share, which would adjust to $16.81 when applying an underwriting-margin-normalized 92% combined ratio.

BofA applies the S&P 500 consensus 2027 price-to-earnings multiple of 18.6 times to the adjusted 2028 estimate to arrive at its price target. The firm reiterated its Buy recommendation, citing upside potential and expected strong dividend support.

In other recent news, Progressive Corporation reported a 10% increase in net income for the first quarter, reaching $2.82 billion, compared to $2.57 billion in the previous year. The company also saw a 6% rise in net premiums written, totaling $23.64 billion, up from $22.21 billion. Earnings per share for common shareholders increased to $4.80 from $4.37, marking a 10% gain. Analyst reactions varied, with Goldman Sachs maintaining a Buy rating and a $216 price target, citing strong auto results and favorable earnings. In contrast, Morgan Stanley reiterated an Underweight rating with a $190 price target, noting steady results but highlighting elevated net written premium growth due to calendar adjustments. Barclays continues to hold an Overweight rating with a $247 price target, maintaining a positive outlook on the company. Meanwhile, BofA Securities adjusted its price target to $295 from $305, keeping a Buy rating, and anticipates a higher than expected policy count growth for March 2026. These developments highlight the diverse perspectives among analysts regarding Progressive’s financial performance and future prospects.

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