Progressive (NYSE:PGR) Shares Gap Down – Should You Sell?

Shares of The Progressive Corporation (NYSE:PGR) gapped down prior to trading on Wednesday. The stock had previously closed at $222.88, but opened at $206.97. Progressive shares last traded at $201.6380, with a volume of 971,906 shares trading hands.

Key Headlines Impacting Progressive

Here are the key news stories impacting Progressive this week:

• Positive Sentiment: Quarterly earnings beat expectations. Progressive reported adjusted EPS of $4.37, slightly above the $4.35 consensus estimate, while revenue of $23.19 billion exceeded analysts’ $22.61 billion forecast. Progressive quarterly earnings report
• Positive Sentiment: Underwriting remained a major strength. The third-quarter combined ratio improved to 88.7% from 89.5% a year earlier, while September’s ratio improved to 90.0% from 100.4%. The results support the view that Progressive continues to manage claims and pricing effectively. Progressive Q3 earnings and underwriting results
• Positive Sentiment: Long-term growth and valuation remain supportive. Policies in force increased 6% year over year to 40.489 million, and some investors continue to view PGR as a growth-at-a-reasonable-price insurer, given its durable demand, strong profitability and trailing P/E near 10.7 times. Growth at a reasonable price stocks
• Neutral Sentiment: Analyst opinion is becoming more cautious. BMO lowered its price target to $216 from $221, while other analysts reportedly reduced targets to $246 and $196. The mixed targets indicate that the recent earnings beat has not fully resolved concerns about future growth.
• Negative Sentiment: Slowing growth pressured sentiment. Net premiums written rose 4% year over year in the quarter but only 2% in September, while quarterly net income fell 3% to $2.542 billion. Analysts cited slower premium growth, weaker forward EPS expectations and a lower-than-expected increase in policies in force as reasons to maintain a “Hold” view. Progressive hold analysis

Wall Street Analyst Weigh In

Several research firms have recently commented on PGR. BMO Capital Markets restated a “market perform” rating on shares of Progressive in a research report on Thursday. Wells Fargo & Company reduced their target price on shares of Progressive from $201.00 to $196.00 and set an “underweight” rating for the company in a research note on Thursday. Roth Capital restated a “buy” rating and issued a $245.00 target price (up from $235.00) on shares of Progressive in a research report on Thursday, August 20th. The Goldman Sachs Group raised their price target on shares of Progressive from $233.00 to $235.00 and gave the company a “buy” rating in a research note on Thursday, October 1st. Finally, Piper Sandler lifted their price target on Progressive from $241.00 to $242.00 and gave the company an “overweight” rating in a report on Thursday, August 20th. Nine analysts have rated the stock with a Buy rating, twelve have assigned a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, the company has an average rating of “Hold” and an average target price of $234.25.

Progressive Trading Up 0.1%

The firm has a market capitalization of $124.20 billion, a P/E ratio of 11.19, a PEG ratio of 2.31 and a beta of 0.25. The business’s 50 day moving average is $214.71 and its two-hundred day moving average is $209.37. The company has a quick ratio of 0.29, a current ratio of 0.31 and a debt-to-equity ratio of 0.24.

Progressive (NYSE:PGR) last announced its earnings results on Wednesday, July 15th. The insurance provider reported $5.67 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $4.64 by $1.03. The firm had revenue of $23.61 billion during the quarter, compared to analyst estimates of $19.49 billion. Progressive had a net margin of 12.67% and a return on equity of 34.06%. Progressive’s revenue was up 5.0% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $5.40 EPS. Analysts expect that The Progressive Corporation will post 18.15 EPS for the current year.

Progressive Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Friday, October 9th. Investors of record on Thursday, October 1st were paid a dividend of $0.10 per share. This represents a $0.40 dividend on an annualized basis and a dividend yield of 0.2%. The ex-dividend date was Thursday, October 1st. Progressive’s dividend payout ratio (DPR) is currently 2.01%.

Insider Activity

In other Progressive news, CFO Andrew J. Quigg sold 3,499 shares of the stock in a transaction on Tuesday, July 28th. The stock was sold at an average price of $220.00, for a total transaction of $769,780.00. Following the completion of the transaction, the chief financial officer directly owned 42,595 shares of the company’s stock, valued at approximately $9,370,900. This trade represents a 7.59% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Steven Broz sold 1,225 shares of Progressive stock in a transaction on Thursday, September 24th. The shares were sold at an average price of $204.29, for a total value of $250,255.25. Following the transaction, the insider owned 30,032 shares in the company, valued at approximately $6,135,237.28. This trade represents a 3.92% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 106,782 shares of company stock valued at $22,965,332 over the last 90 days. Corporate insiders own 0.32% of the company’s stock.

Institutional Trading of Progressive

Hedge funds and other institutional investors have recently modified their holdings of the company. BlackRock Inc. acquired a new position in Progressive during the second quarter worth about $10,496,271,000. State Street Corp raised its position in Progressive by 2.5% in the second quarter. State Street Corp now owns 26,526,959 shares of the insurance provider’s stock worth $5,794,814,000 after acquiring an additional 656,249 shares in the last quarter. Bank of America Corp DE bought a new stake in Progressive in the second quarter worth about $2,682,342,000. GQG Partners LLC bought a new stake in Progressive in the second quarter worth about $1,538,570,000. Finally, UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC lifted its holdings in Progressive by 6.4% in the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 6,784,205 shares of the insurance provider’s stock valued at $1,482,010,000 after acquiring an additional 410,326 shares during the last quarter. Institutional investors own 85.34% of the company’s stock.

About Progressive

Progressive Corporation is an insurance holding company that provides personal and commercial insurance products in the United States. Its primary business is automobile insurance, serving consumers through direct channels, independent agents and other distribution partners.

The company offers coverage for personal vehicles, motorcycles, recreational vehicles, boats and other specialty vehicles. Its personal insurance portfolio also includes homeowners, renters, condominium and other property coverage, while its commercial business provides insurance for commercial vehicles and related risks.