Goldman Upgrades Progressive, Downgrades Allstate

NEW YORK (AP) — With signs showing that auto insurance rates could start to increase, Goldman Sachs on Friday upgraded Progressive Corp. by two notches on the theory the low-cost insurer could benefit from consumers shopping around.

At the same time, Goldman downgraded Allstate Corp., suggesting the company may lose market share and investors should take advantage of the stock's rebound since it bottomed out in March.

Goldman analyst Christopher M. Neczypor put a "Buy" rating on Progressive, upgrading his recommendation from "Sell," for the Mayfield Village, Ohio-based company.

In a note to clients, Neczypor said that Progressive stands to gain from higher auto insurance prices in two ways. The first would be through hiking its own rates. The second benefit would come from increasing its market share as people search for new policies. He noted that more people are likely to search online for better rates, which will help Progressive since it sells directly to consumers.

"Thus, as rates increase, Progressive should benefit from both rate and volume growth," he said.