Why I Think Progressive Will Hit $300 Over The Next Two Years
Progressive (PGR) is best known for its catchy commercials commonly featuring Flo and Jamie. Now, while they have certainly made whoever “Flo” actually is wealthy over the last decade, their stock has made a lot of other people wealthy as well.
And I have an extremely high degree of confidence in Progressive. In fact, I expect it to continue its meteoric rise and climb to $300+ a share in the next 2 years or so. Currently, PGR is trading at right around $210 a share.
Progressive is the poster child for consistent, stable, and steady growth. In fact, I think it’s one of the steadiest stocks on the planet. One of their “superpowers” is that they are able to generate the majority of their revenue from government-mandated insurance policies so that regardless of economic situations that revenue is pouring in.
We have a plethora of government insurance requirements — almost every state in the US requires a driver to have car insurance. Literally, every state other than New Hampshire and Virginia requires car insurance.
Bodily injury car insurance is needed in every state except Florida, property damage insurance is required in all states, plus Washington, D.C., and Uninsured motorist insurance is required in about half of the states.
People will always have cars, boats, and houses (at least for the next 2 years until AI takes over 😉 ). And as long as people have mortgages, and loans, which have insurance requirements… Or want to drive their cars legally on the road, they will have to pay their premiums no matter what economic conditions are present.
And with Progressive’s savvy marketing, household name, and focus on affordability and bundling, they are positioned to continue growing in an ever-broadening and international economy like ours.
What people may not realize (a sneaky win for PGR) is that the world is getting safer. It always feels more dangerous because we hear so much negative news from around the globe in our constant news cycle.
Whether it’s a tornado in South America, a cruise ship wreck in Australia or a contagion spreading in Asia… Our 24-hour, information-overload, share-the-worst-news-possible environment breeds feelings of fear.
But the reality is that the world gets safer consistently.
Motor vehicle accidents go down, injuries are less life-threatening, safety devices for all sorts of activities are increasing. And there’s no doubt that AI will add more safety, whether that is autopilot vehicles, more accurate medical diagnosis and operations or just better data to make good decisions… We are definitely moving in a powerful trend toward safety.
Think about what that means for an insurance company like Progressive!
They will pay out fewer claims and keep more revenue.
And they’re not going to lower their premiums just because the world is safer…
They don’t have to! You and I won’t stop paying our premiums, their competitors aren’t… That means profitability and margins can boost more and more on a profit-increasing treadmill.
Now remember, Progressive is a stock I watch all the time. And while I love it, it doesn’t only go up. In fact, there’s another thing about the company I’d like to show you:
PGR is an interesting case study. Just by buying it every time it makes a new high, you’d be in incredible shape historically.
It’ll make a new high, then pull back over the next several months and surge higher. You can see that in my chart above that shows each of these points and pullbacks.
Right now, Progressive is in another one of these pullbacks — a consolidation period — and my guess is that we’ll get a breakout next week, next month, or in 3 months…
There’s no exact way to tell, but if history repeats itself (which it so often does), we should see Progressive surge higher in the very near future.
But you don’t have to guess when that surge will happen… Just wait for it to happen and then trade it! That’s what I love about trading these kinds of stocks.
When that happens, I think it’ll be a great buy even if most people act like it’s too late at that point.
— Nate Tucci
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