JPMorgan sees ‘long-term attractive gains’ for Progressive Corp.

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They stated that the concerns of short-term pain are creating long-term attractive gains.

While the analysts acknowledged that PGR, which fell over 13% on Thursday last week, reported “poor” June results, they said it does not alter the firm’s long-term view of the company’s earnings power and growth potential.

“We have been reluctant to recommend PGR due to optimistic consensus EPS estimates, and expected slowdown in PIF growth and a stretched valuation,” they wrote.

“EPS forecasts remain high, but growth expectations have become less optimistic, and valuation seems compelling following the stock’s pullback.”