Chicago, IL – March 7, 2025 – Zacks Equity Research shares The Progressive PGR, as the Bull of the Day and PetMed Express PETS as the Bear of the Day. In addition, Zacks Equity Research provides analysis on — Ford F, General Motors GM and Stellantis STLA.
Here is a synopsis of all five stocks:
2025 has already been a challenging year for the market, but one investment factor has outperformed: low volatility. Stocks with historically lower volatility have significantly outperformed, proving to be the market’s strongest segment amid uncertainty.
One of my top picks in this group is The Progressive, a stock I have consistently recommended over the past year and one that remains an attractive investment today. It not only delivers strong returns with lower volatility and defensive positioning but also holds a top Zacks Rank and steady growth forecasts, making it a compelling choice for investors looking for stability and upside.
The chart below illustrates exactly why I’ve been highlighting The Progressive stock for more than a year—consistent upward revisions to its earnings estimates. Earnings revisions are the foundation of Zacks’ stock analysis, and PGR is a prime example of why they matter. Analysts began raising estimates in mid-2023, and since then, the stock has more than doubled.
More recently, analysts have unanimously raised their earnings forecasts across multiple timeframes. In just the last two months, estimates have been revised higher by as much as 17.5%, and even in the past week, projections have continued to climb. Not surprisingly, PGR enjoys a Zacks Rank #1 (Strong Buy) rating.
Progressive has also been on an encouraging streak of earnings beats. The company has exceeded analyst expectations for five consecutive quarters, and based on the Zacks Earnings ESP, it is projected to beat again next quarter by 1.27%.
The Progressive currently trades at a one-year forward earnings multiple of 18.7x, which is only slightly above its 10-year median of 17.7x. This narrow spread suggests that, despite its strong performance, the stock is not excessively expensive relative to its historical valuation.
Such a reasonable valuation reinforces Progressive’s appeal as a sound investment, offering both attractive returns and growth potential without overpaying.
Progressive’s combination of low volatility, strong earnings growth, and reasonable valuation makes it a standout stock in today’s uncertain market. With analysts continuing to raise earnings estimates and the company consistently delivering earnings beats, PGR remains one of the most attractive defensive plays available.
Despite its impressive rally, the stock is not overvalued relative to its historical norms, suggesting there is still room for upside. Add in its top Zacks Rank and strong industry positioning as the nation’s second largest auto insurer, the Progressive offers a compelling mix of stability, steady growth, and resilience in a challenging market environment.
For investors looking to outperform while minimizing risk, PGR remains a top-tier choice.
PetMed Express is built around an appealing concept—capitalizing on the rapidly growing pet ownership trend by offering pet medications and health products through an online platform. In theory, the company is well positioned in a market where pet spending continues to rise. However, its execution has failed to keep pace with industry growth, and the stock’s sharp decline over the past two years reflects a business struggling to maintain momentum.
Sales and earnings have been on a steady decline, and analysts have consistently lowered earnings estimates, signaling deteriorating fundamentals. Despite this weakness, the stock still trades at a surprisingly high relative valuation, making it an even less attractive option for investors. Without a clear turnaround in revenue growth and profitability, PETS remains a stock to avoid until its fundamentals show signs of meaningful improvement.
PetMed Express has been caught in a multi-year sales decline, and the outlook remains bleak. Annual revenue has been shrinking for the last three years, and analysts expect this trend to continue. Sales are projected to decline by 18.6% this year and another 6.8% next year, indicating persistent weakness in the company’s ability to generate growth.
Earnings expectations have also been consistently revised lower, further underscoring PetMed’s deteriorating fundamentals. In just the past month, analysts have cut their estimates for the current quarter by 20%, while full-year 2025 earnings forecasts have been slashed by 20.8%. The company now holds a Zacks Rank #5 (Strong Sell) rating, reflecting its unfavorable earnings trajectory.
The outlook for profitability is even more concerning, with earnings projected to plummet by 84% over the next year. With sales momentum fading and margins under pressure, the company faces significant hurdles to reversing its downward trajectory.
Despite its ongoing struggles, PetMed Express continues to trade at a surprisingly high valuation. The stock currently carries a one-year forward earnings multiple of 21.1x, which is in line with the broader market. However, given the company's deteriorating fundamentals this valuation appears difficult to justify and could further increase the downside risk in the stock.
With declining sales, shrinking earnings, and ongoing analyst downgrades, PetMed Express faces significant challenges that show no signs of easing. The company’s inability to capitalize on the booming pet care industry raises concerns about its long-term viability, especially as competition intensifies from larger e-commerce players and traditional pet retailers.
Despite these headwinds, PETS continues to trade at a valuation that appears too high given its weak fundamentals, making it even less attractive for investors. Until the company can stabilize its business, improve profitability, and regain earnings momentum, there is little reason to take a chance on this struggling stock. For now, PETS remains a stock to avoid, as further downside risk appears likely.
President Donald Trump’s 25% tariff on imported goods from Canada and Mexico took effect on March 4, shaking the automotive industry and sending most auto stocks into the red on Tuesday. However, yesterday, the White House announced a one-month exemption for U.S. automakers that comply with the U.S.-Mexico-Canada Agreement (USMCA). This temporary pause sparked a brief rally in auto stocks, but does it offer real relief, or is it just delaying the inevitable?
The announcement of the one-month exemption led to a swift recovery in auto stocks. Major players like Ford, General Motors and Stellantis saw their stock prices rebound after Tuesday’s losses. F, GM and STLA rose roughly 6%, 7% and 9%, respectively, reflecting investor optimism, as the exemption eased concerns about immediate cost increases and potential profit declines.
While this temporary exemption offers a brief sigh of relief, it does not erase the uncertainty looming over the industry. The reality is that once the exemption period ends, tariffs would push vehicle prices significantly higher, affecting sales and profitability.
Some reports suggest that tariffs are expected to increase vehicle prices by as much as $12,000, but only for cars that have not yet been built or imported. This poses a significant challenge for consumers already grappling with high vehicle costs.
According to Kelley Blue Book, Trump’s tariffs could raise the average new car price—already nearing $49,000—by at least $3,000, Full-size pickup trucks, a key segment for U.S. automakers, could see price hikes of up to $10,000.
This means that the current inventory on dealer lots is a temporary hedge against the expected price hikes. According to CarGurus.com, new car inventory is up 12% compared to last year, allowing consumers a short window to purchase vehicles at pre-tariff prices. However, once these cars are sold, prices could rise sharply.
Used cars remain another option, as they are also exempt from tariffs. But availability is tightening. In February, the supply of used cars was 45.2 days, a decline from January’s 49.5 days. As new vehicle prices climb due to tariffs, demand for used cars will likely rise, driving up their prices as well.
The Big 3 automakers face varying degrees of exposure to the tariffs. GM’s Chevrolet and GMC pickups, along with Stellantis’s Ram, are particularly vulnerable due to their reliance on Mexican manufacturing. In contrast, Ford builds its F-Series trucks in the United States but still sources some key components, such as engines, from Canada.
The complex supply chain that connects the three North American economies means that no automaker is likely to be fully insulated from the impact of tariffs. While the one-month exemption delays the impact of tariffs, it isn’t solving the deeper issues they create.
Vehicles built in the United States often rely on components from Canada and Mexico. Research shows that Mexico supplies up to 40% of components used in U.S. vehicles, while Canada contributes over 20%. Tariffs on these parts will ripple through the entire supply chain, ultimately increasing costs for both manufacturers and consumers. Suppliers, already dealing with high costs, may struggle to absorb these tariffs, potentially leading to job losses and production cuts.
Industry analysts predict that prolonged tariffs could lead to production slowdowns or even shutdowns at some plants. S&P Global Mobility warns that if tariffs persist beyond eight weeks, the industry could face a scenario they call "Tariff Winter." In this case, North American light-vehicle sales could decline by 10% over several years, with Mexico and Canada also seeing significant drops.
Trump’s one-month exemption gives automakers a short break, but it doesn’t solve the bigger problems that these tariffs would eventually create. The market saw a quick boost, but the long-term impact is unclear. Once the exemption ends, costs will rise for automakers, suppliers, and consumers. If no deal is reached, higher prices are inevitable. Companies are already figuring out how to handle the extra costs, but the real question is how long the tariffs will last once enacted—and that’s anybody’s guess.
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Ford Motor Company (F) : Free Stock Analysis Report
PetMed Express, Inc. (PETS) : Free Stock Analysis Report
The Progressive Corporation (PGR) : Free Stock Analysis Report
General Motors Company (GM) : Free Stock Analysis Report
Stellantis N.V. (STLA) : Free Stock Analysis Report
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