Investing.com -- Morgan Stanley raised its earnings estimates for Progressive Corp (NYSE:PGR), citing a stronger underwriting environment and improving margins as new policy strain eases. The brokerage reiterated its Overweight rating and increased its price target to $317 from $307.
Morgan Stanley now expects Progressive to report earnings of $16.60 per share in 2025, up from its prior forecast of $14.81, supported by a near 90% combined ratio.
The brokerage also lifted its 2026 EPS estimate to $17.31 from $16.04.
Progressive added a record 4.2 million new personal auto policies in 2024, which initially pressured margins. However, as these policies mature, Morgan Stanley expects a positive impact on profitability in 2025. The firm also noted that January’s combined ratio was the best in recent memory, particularly in the Agency Auto channel.
“Post January results and 4Q24 industry earnings, Progressive stood out above the rest in terms of growth and profitability. We now see a much more durable underwriting environment that supports a higher EPS growth trajectory,” analyst at Morgan Stanley said.
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