Key Takeaways
- PROG Holdings shares have lost 30% in three months, and on Oct. 7 Jefferies cut its price target to $50 from $60 but kept its Buy rating.
- Jefferies’ $50 target is 65% above the Oct. 7 close.
- The main risk is credit: leasing write-offs ran at 8.4% of leasing revenue in the second quarter, and a short seller says the company’s underwriting is reckless.
- The numbers back the call, because the target only asks for the stock’s normal multiple on earnings that management raised its guidance for in July.
PROG Holdings (PRG) has lost 30% in three months, and Jefferies still thinks it can climb 65% from here.
A beat the market didn’t buy
On July 29, PROG reported second-quarter adjusted EPS of $1.19, up 19%. It also raised its 2026 guidance to $4.75 to $5.00 a share, from $4.40 to $4.80.
The stock fell anyway, as investors zeroed in on credit. Write-offs at Progressive Leasing ran at 8.4% of leasing revenue. CFO Brian Garner said full-year write-offs would stay in the 6% to 8% target range, “albeit near the high end of that range.”
On Oct. 7, short seller Jehoshaphat Research argued PROG has turned to “reckless underwriting” “to obscure weak demand.”
What Jefferies sees
The same day, Jefferies analyst John Hecht kept his Buy rating but cut his price target to $50 from $60. He had upgraded PROG in July, arguing the outlook was improving as the core business recovered. Even after the cut, $50 sits 65% above the $30.26 close on Oct. 7.
Does $50 add up?
The consensus target is $53, and even the Street’s lowest, $45, sits well above today’s price.
The consensus has climbed from $39 a year ago, while the stock is right back where it started: $30.76 then, $30.26 now.
Analysts expect normalized EPS to rise from $3.51 in 2025 to $4.92 this year and $5.55 in 2027.
That 2026 figure sits near the top of management’s raised range, so the Street is taking the guidance at face value.
The market isn’t paying for any of it. PROG trades at 6.1x forward earnings, against a five-year average of 9.6x and a low of 4.2x in October 2022.
At $30.26 and 6.12x, the market is pricing in about $4.94 of earnings a share over the next twelve months. Divide $50 by $4.94, and the target implies about 10.1x, just above the stock’s five-year average.
So is Jefferies right?
The risk is in the earnings themselves: if write-offs run hot, the estimates come down.
Still, the numbers back Jefferies. Its $50 target asks only for PROG’s average multiple, on earnings that management raised its guidance for in July.
The next test comes Wednesday, Oct. 28, with third-quarter results. Watch the leasing write-off rate: if it points to a year above that 6% to 8% range, $50 gets much harder to reach.
So what is PROG Holdings stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
