11:55 AM EDT, 09/16/2024 (MT Newswires) -- Progressive (PGR) is seeing strong premium growth amid rising competition, mostly because of an increase in the number of policies it holds, Morgan Stanley said in a note Monday.

The analysts said that while the competitive landscape is getting tougher, only a few competitors can match Progressive's policy-in-force, or PIF, growth.

Competition is expected to build up by 2025, allowing Progressive to maintain high single-digit growth in personal auto policies through 2025 and 2026. The analysts also said that their previous estimate that the company will reach an 18% market share by the end of 2028 is "conservative."

In the latest monthly earnings report, Progressive achieved its first-ever two consecutive months with over 400,000 new personal auto PIF add months, the analysts said, adding that the scale of this growth is "underappreciated." This positions the company well to potentially reach over 20% market share in the next five years, they said.

"With management's strong commitment to underwriting profit, Progressive is positioned for profitable growth heading into 2025. In our view, Progressive has tightened up its underwriting standards and the company's reserving remains stable," the analysts added.

Morgan Stanley adjusted its price target on Progressive to $300 from $260 while maintaining its overweight rating.

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