Goldman Sachs reiterated its Buy recommendation on Progressive Corp. following the insurer's January 2026 operating results, maintaining a $225.00 price target. The stock is trading at $202.85, close to a 52-week low of $197.92, and, according to InvestingPro analysis cited alongside the results, appears undervalued relative to its Fair Value.
The firm left its average earnings-per-share estimate for 2026-2028 unchanged. Goldman Sachs described the outlook as balanced - modestly weaker growth assumptions are offset by a stronger expectation for buybacks.
Operationally, January's Personal Auto net premiums written growth missed Goldman Sachs' expectations by roughly 3 percentage points. In response, the firm trimmed its 2026 Personal Auto net premiums written growth forecast by slightly more than 1 percentage point, and applied a similar reduction to its projection for total company 2026 net premiums written growth.
Goldman Sachs now models a 3 percentage point decline in net premiums earned per policy during 2026, up from a prior 2 percentage point assumption. Offsetting some of the pressure on top-line dynamics, the firm increased its aggregate estimate for share repurchases in 2026 and 2027 to $7 billion - a figure it notes is 3.5 times the Street estimate of $2 billion.
The bank singled out Progressive as one of the more compelling investment opportunities within property and casualty insurance, pointing to potential upside in policies in force growth. Goldman Sachs projects policies in force will rise 8.1% in 2026, versus a Street consensus of 7.3%.
Additional data points highlighted alongside Goldman Sachs' view include analyst behavior and valuation metrics. InvestingPro Tips show 11 analysts have revised their earnings estimates higher for the approaching period. The company is trading at a P/E ratio of 10.54 and a PEG ratio of 0.32, and is included among the more than 1,400 US equities covered by the referenced Pro Research Reports.
Progressive's reported monthly results showed a 4% increase in net income for January 2026, rising to $1.16 billion from $1.12 billion a year earlier. Net premiums written increased 4% to $6.74 billion, while net premiums earned rose 5% to $6.92 billion.
Market reactions have been varied. Jefferies lowered its price target to $216, citing concerns about the Personal Auto loss ratio and the expense ratio. Keefe, Bruyette & Woods trimmed its price target to $225 and pointed to auto growth concerns as a reason for the adjustment. In contrast, Goldman Sachs was also referenced as reiterating its Buy with a $230 price target in commentary noting steady EPS estimates and increased growth forecasts for Personal Auto policies. BMO Capital cut its price target to $232 but retained a Market Perform rating, suggesting the firm believes the worst of the top-line deceleration could be behind the company.
These divergent analyst moves underscore differing interpretations of Progressive's near-term auto insurance trends and the offsetting role that share repurchases may play for shareholder returns. Collectively, the updates reflect a range of opinions on how pressures in Personal Auto metrics will reconcile with measured capital deployment and longer-term earnings assumptions.
Summary
Goldman Sachs kept a Buy on Progressive with a $225.00 price target after January 2026 results, balancing modest reductions in growth assumptions with a larger expected buyback program. January metrics showed mixed operating signals, and other brokers adjusted price targets and ratings in response, producing a range of views on the company's auto insurance momentum.
Key points
- Goldman Sachs reiterated Buy with a $225.00 price target and left 2026-2028 EPS estimates broadly unchanged.
- January Personal Auto net premiums written growth missed expectations by about 3 percentage points; Goldman trimmed 2026 Personal Auto and total company net premiums written growth forecasts by slightly over 1 percentage point.
- Goldman Sachs increased its aggregate 2026/2027 buyback estimate to $7 billion, far above the Street estimate of $2 billion, and forecasts policies in force growth of 8.1% in 2026 versus a 7.3% Street estimate.
Risks and uncertainties
- Personal Auto underwriting performance - January results showed weaker-than-expected net premiums written growth and other brokers cited loss ratio and expense ratio concerns, affecting underwriting profitability.
- Top-line growth deceleration - several firms adjusted price targets downward due to slower auto growth, which could pressure revenue growth in the personal auto segment.
- Analyst disagreement on outlook - divergent price targets and ratings indicate uncertainty in how underwriting trends and buybacks will combine to affect shareholder value.