Cyclical Ceiling In Sight? BofA Turns Cautious On Progressive During Macro Shifts

Group 1 - BofA Securities analyst Joshua Shanker downgraded Progressive Corp from Buy to Neutral, lowering the price forecast from $300 to $287, citing potential cyclical "margin peak" despite the company's defensive positioning amid recession concerns and new U.S. tariffs [1] - Earnings growth for Progressive is expected to "decelerate" in 2026, although the analyst's forecasts remain higher than consensus estimates, indicating a shift in outlook [2] - Shanker's earnings per share forecasts for Progressive are $18.35, $18.80, and $20.40 for 2025 through 2027, representing a significant premium of 18% to 21% above current consensus estimates [3] Group 2 - Progressive has achieved a 15% compound annual growth rate in revenue over the past decade through 2024, primarily through organic growth with minimal changes to its share count [5] - The company’s operating earnings per share have grown at a 22% annual rate over the same period, significantly outpacing typical growth in the insurance sector [5] - Tariffs may negatively impact margins more than anticipated, similar to inflation in used cars and parts during 2021–2022, but this is not seen as a major factor in valuing Progressive [6] Group 3 - Progressive shares closed down 10.23% at $257.64 on Friday, reflecting market reactions to the downgrade and broader economic concerns [7]