Why progressive stock is down nearly 2% today

In a case of conviction with poor credit, Progressive (PGR -1.72%) the stock took some hits on thursday. One analyst has initiated coverage of the stock, pointing out several positives and negatives that could affect its price. Investors were clearly more focused on the latter as they bid the quoted price down nearly 2% during the trading session. That put her deeper in the red than the bell S&P 500 index, which fell by 0.3%.

Coverage launched by the international bank

BarclaysAlex Scott officially launched his tracking of Progressive stock just after market hours on Wednesday. The analyst opened with an equal recommendation (read: hold) and a price target of $267 per share on the insurer’s stock.

While he tagged Progressive with the equivalent of a hold rating, he highlighted some negatives and positives about the company in his inaugural research note. Pluses for its future include potential avenues for growth. However, he expressed concern that the personal motor insurance segment could be heading for a “softer” market, with strong price competition coming sooner than many expect.

Additionally, Scott wrote, “We don’t see industry-wide growth for this market, and Progressive already has a 15 percent market share.

Future opportunities?

Still, the forecaster didn’t write off Progressive’s future potential entirely, especially given top competitor GEICO’s apparent strategy. Scott wrote that GEICO’s assertive withdrawal from the market leaves a vacuum for competition.

Such a withdrawal could also lead to a decrease in industry-wide marketing costs, as GEICO is a very active advertiser. That, in turn, could lead to higher profitability, assuming premiums don’t drop too much.