NEW YORK (TheStreet) -- The Progressive Corp. (PGR - Get Report) was upgraded to "market perform" from "underperform" with a $22.50 price target at Keefe, Bruyette & Woods (KBW).
Shares of Progressive are lower by -0.34% to $23.36 in early market trading today.
Separately, TheStreet Ratings team rates PROGRESSIVE CORP-OHIO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PROGRESSIVE CORP-OHIO (PGR) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.4%. Since the same quarter one year prior, revenues slightly increased by 3.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.33, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Insurance industry and the overall market, PROGRESSIVE CORP-OHIO's return on equity exceeds that of both the industry average and the S&P 500.
- PROGRESSIVE CORP-OHIO's earnings per share declined by 9.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PROGRESSIVE CORP-OHIO increased its bottom line by earning $1.94 versus $1.48 in the prior year. For the next year, the market is expecting a contraction of 16.0% in earnings ($1.63 versus $1.94).
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, PGR has underperformed the S&P 500 Index, declining 5.92% from its price level of one year ago. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
- You can view the full analysis from the report here: PGR Ratings Report