Barclays Maintains an 'Equalweight' on Progressive Corp. (PGR); 2Q11 Results Worse Than Anticipated; Stock Appears Fairly Valued

Barclays maintains an 'Equalweight' on Progressive Corp. (NYSE: PGR), PT $21.

Barclays analyst says, "PGR's 2Q11 EPS was worse than our outlook and the consensus reflecting higher-than-anticipated catastrophe losses and a deterioration in the June underlying underwriting results, although underwriting results for all of 2Q11 were solid...We view PGR as one of the best-run companies in the P&C insurance industry as evidenced by its focused and differentiated auto insurance product offerings, consistent earnings, and peer-leading ROE. It remains to be seen whether elevated gas prices and a sluggish economic recovery will drive a further decline in loss cost inflation. PGR's valuation approaches fair value in our view at 2.12x stated BV (2.44x BV ex AOCI, 12.7x 2012E EPS of $1.65). All else equal, we would look for a pullback in PGR shares to around the $19 range (1.9x BV) before seeing attractive upside potential."

For more ratings news on Progressive Corp. click here and for the rating history of Progressive Corp. click here.

Shares of Progressive Corp. closed at $20.13 yesterday.

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