Wells Fargo Downgrades Progressive to Underweight, Slashes Price Target to $205

Key Facts

In a move highlighting growing concerns over insurers' ability to sustain premium growth amid fierce competition, Wells Fargo downgraded Progressive Corp. from Equal Weight to Underweight and slashed its price target from $219 to $205. The downgrade reflects expectations of increased competition and moderating rate increases, particularly in seasonally weaker months. The bank noted that rising competition will add further pressure on growth.

Progressive shares closed at $224.34 on June 26 (per market data), well above the new $205 target, suggesting potential downside. The stock hit a low of $215.63 during the session, exhibiting clear selling pressure. The downgrade from Wells Fargo comes at a time when the property & casualty insurance sector faces intensifying competition, which could prompt other investment banks to revisit their ratings.

Investors are watching Progressive's upcoming quarterly results to gauge the impact of competition on written premiums. Changes in interest rates could also affect the company's investment returns. With the stock trading above the new price target, the market may look for support near the $215 area, while resistance lies around $225, based on the latest session's high and low. Analyst commentary on the sector from Wall Street will be influential in the coming trading sessions.