Progressive Corp. (PGR) PT Lowered to $348 at BofA Securities

BofA Securities analyst Joshua Shanker lowered the price target on Progressive Corp. (NYSE: PGR) to $348.00 (from $350.00) while maintaining a Buy rating.

The analyst comments "In keeping with its practice of principally returning capital to shareholders via a variable annual dividend payable at the end of the year, Progressive announced a $13.50/sh dividend payable to shareholders of record on January 2, representing nearly $8bn of capital return. This is in-line our September 29 forecast that Progressive will return $40bn to shareholders in the 5¼ years ended 2030. We forecasted a $10/sh dividend (well above the ex-BofA consensus of $3.13/sh and $3.96/sh according to Bloomberg and VisibleAlpha, respectively). With the dividend $2bn incremental to our forecast, we expect less cash will be available for repurchases. We are lowering our share repurchase forecast of $250-300mn per month through 2027 to $50-100mn. While some investors may argue otherwise, company management—despite indicating shares to be trading at currently attractive valuation in the recent 10-Q—embraces a Modigliani-Miller-style equivalence when it comes to the dividends vs. repurchases debate."

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