NEW YORK (TheStreet) -- Shares of The Progressive Corp (PGR) are declining, lower by 0.76% to $27.47 in early market trading Tuesday, after the insurance company was downgraded to "neutral" from "buy" by analysts at Goldman Sachs this morning.
The firm maintained its $28 price target on shares of Progressive.
Goldman Sachs analysts said the insurance company lacks near-term catalysts.
Mayfield Village, OH-based Progressive is an insurance holding company that provides personal and commercial automobile insurance and other specialty property-casualty insurance and related services.
The company operates businesses throughout the U.S. and sells personal auto insurance on an Internet-only basis in Australia. It offers personal and commercial property-casualty insurance products related to motor vehicles.
Separately, TheStreet Ratings team rates PROGRESSIVE CORP-OHIO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PROGRESSIVE CORP-OHIO (PGR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, increase in net income, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.7%. Since the same quarter one year prior, revenues rose by 12.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Insurance industry average. The net income increased by 23.5% when compared to the same quarter one year prior, going from $299.80 million to $370.20 million.
- PROGRESSIVE CORP-OHIO has improved earnings per share by 24.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PROGRESSIVE CORP-OHIO increased its bottom line by earning $2.15 versus $1.94 in the prior year. For the next year, the market is expecting a contraction of 16.3% in earnings ($1.80 versus $2.15).
- Despite currently having a low debt-to-equity ratio of 0.31, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- You can view the full analysis from the report here: PGR Ratings Report