Goldman Sachs Reiterates Buy Rating on Progressive Corp. (PGR)

Goldman Sachs analyst Alex Scott reiterated a Buy rating and $304.00 price target on Progressive Corp. (NYSE: PGR).

The analyst comments "PGR March operating EPS of $1.17 missed VA Consensus/GSe of 1.23/$1.44, with the miss on our estimate driven primarily by a ~300bps miss on catastrophe losses, as well as a 40bps miss on the attritional combined ratio. The Personal Auto attritional loss ratio missed our estimate by ~140bps, while the commercial lines/homeowners attritional loss ratios beat our estimates by 40bps/1050bps. Personal auto YoY PIF growth of 21.9% materially beat our expectation +20.8% (572k policies added MoM vs GSe/VA Consensus 275k/354k), with the beat on our estimate driven by stronger than expected growth results across Direct and Agency. NPW growth of 17% came in below our expectation for 19% NPW growth, primarily driven by lower than expected growth in Personal Lines (21.2% vs. 23.6% GSe). The personal auto expense ratio of 19.6% was modestly lower than our estimate (20.2%), yet continues to indicate that PGR is maintaining historically elevated levels of ad spend (which we view favorably). The 6.0% cat loss ratio missed GSe/VA Consensus estimates of 3.2% and PGR highlighted March SCS as the driver of the month's cat losses ($410mn vs. GSe/VA Consensus of $220mn-$225mn). We expect a positive initial reaction to the print, driven by the historically strong PIF growth result, following the weaker result in February, partially offset by the miss in the personal auto underlying loss result."

For an analyst ratings summary and ratings history on Progressive Corp. click here. For more ratings news on Progressive Corp. click here.

Shares of Progressive Corp. closed at $276.11 yesterday.

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