Zacks Investment Research downgraded shares of Progressive Corp. (PGR) from OUTPERFORM to NEUTRAL on May 17, 2013, with a target price of $27.00.
We are downgrading our recommendation on Progressive to Neutral from Outperform on account of stressed bottom line growth and a continued pressure on underwriting margins. However, Progressive's first quarter earnings per share outpaced the Zacks Consensus Estimate as well as the year ago number. Higher premiums largely drove the improvement. Progressive's operating earnings and premiums' growth as well as debt-to-total capital ratio reflect overall constant improvement. Policies in force also remained healthy. The company is poised to benefit from impressive operating performances and its market leading position. Although, the Commercial Auto business is recording year-over-year growth over the past few months, growth could be challenging owing to increasing competition and a soft economic situation.
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