Progressive Corporation provides insurance for personal and commercial autos and trucks, motorcycles, boats, recreational vehicles, and homes. The company was founded in 1937 and is based in Mayfield Village, Ohio.
PGR Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Progressive Corp. To summarize, we found that Progressive Corp ranked in the 72th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 221.5% on a DCF basis. The most interesting components of our discounted cash flow analysis for Progressive Corp ended up being:
The company has produced more trailing twelve month cash flow than 93.19% of its sector Financial Services.
The business' balance sheet reveals debt to be 11% of the company's capital (with equity being the remaining amount). Approximately merely 22.2% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
PGR's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 39.82% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CPTA, IVZ, HNNA, HCI, and NGHC can be thought of as valuation peers to PGR, in the sense that they are in the Financial Services sector and have a similar price forecast based on DCF valuation.
Thesis There’s a reason why, when you are looking to buy insurance of any kind, you want to look at a company that has been around for a long time. That’s because you don’t want to purchase insurance from a company that does a lousy job of investing its premiums....
Financial Freedom Institute on Seeking Alpha | June 17, 2020
Progressive (PGR) May net premiums earned increased 10% to $2.99B from $2.73B a year ago.Combined ratio of 93.7 vs. 91.6.During the month, PGR recognized an increase in renewals, which were delayed from being recognized in March and April, and a decrease in the number of policies canceled during the month.Companywide...