Progressive Downgraded to Underweight at Piper Sandler

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Progressive Downgraded to Underweight at Piper Sandler
Credit: © Reuters.

By Sam Boughedda -- Progressive Corp. (NYSE: PGR ) shares fell in early Monday trading after Piper Sandler analyst Paul Newsome downgraded the company's shares to Underweight from Neutral.

Newsome said in a note to clients that the stock reflects "too much optimism about how fast-rising auto insurance prices will improve PGR's profits."

As a result, the analyst expects PGR will miss future earnings expectations.

Earnings expectations are too high because the benefits of pricing have gotten ahead of themselves, and "growth will likely continue to slow in the next several months," added the analyst.

He concluded that they think Progressive reached peak earnings in 2020 during the pandemic, and it will be many years before the company will achieve that level of earnings.

Progressive's stock price, which is up more than 7% for the year-to-date, tumbled more than 2% following Newsome's comments.

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