Progressive's (PGR) business faces competitive pressures in both the direct and agency channels, which could result in moderate market share gains going forward, UBS said in a Wednesday note.

Despite gaining 300 basis points of market share since year-end 2021, the insurance company's largest competitor in the direct distribution channel, GEICO, is poised to lean into growth and recapture some of the market share it lost in the last several years, UBS analysts said.

"Historically, there has been a reasonable inverse correlation between [Progressive's] and GEICO's [policies in force] growth rate," UBS said.

Meanwhile, the investment firm said Allstate (ALL), which is a smaller competitor in the direct distribution business, is also leaning into growth in the segment.

UBS said it was raising its 2025 earnings per share estimate to $15.74 from $15.11 previously, but was marking down its forecasts for 2026 and 2027. The updated 2025 earnings outlook is based on better-than-expected results in the most recent quarter and a modestly forecasted underlying ratio, UBS said.

The latest 2026 and 2027 EPS outlook are down to $14.70 and $15 from $14.75 and $15.20, respectively, and reflect the firm's expectations of lower premium growth, UBS said.

UBS reiterated a neutral rating on the stock and raised its price target to $291 from $285.

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