Barclays Reiterates an 'Overweight' on Progressive Corp. (PGR); July 2011 Results Below Expectations, Valuation Attractive

Barclays reiterates an 'Overweight' on Progressive Corp. (NYSE: PGR) price target of $23.00.

Barclays analyst says, "PGR's July results appear on track to be lower than we expect for all of 3Q11 due to catastrophe losses and an elevated accident year ex cat combined ratio, although monthly results can be lumpy. It remains to be seen whether elevated gas prices and a sluggish economic recovery will drive further loss cost inflation improvement or if it could rise as the impact of the recession eases. Miles driven declined slightly so far in 2011 reflecting a sluggish economic recovery. Also, demand for gasoline, which is an indicator for miles driven, fell modestly so far in 2011."

"On a positive note, net written premium growth of 5% in July (+4% ex unusual items) was strong and policies-in-force (PIF) growth was stable in July vs June at +5%, which is better than peers reflecting market share gains."

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 $18.29 yesterday.

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