2 Stocks to Sell That Could Pay Off at Tax Time

On the Oct. 12, 2026, episode of The Morning Filter podcast, guest host Sarah Hansen and Morningstar Chief US Market Strategist Dave Sekera discuss why now is the time to sell Netflix NFLX and Progressive PGR stock for tax-loss harvesting. Here is an excerpt from the show.

Why Netflix Stock Is Still Worth Selling

Sarah Hansen: Netflix NFLX has fallen pretty dramatically over the past year, and this is another stock that you have warned investors about in the past. What does Morningstar think today?

David Sekera: Netflix is currently a 3-star-rated stock. Our fair value is at $80 a share. I think it’s trading at about a 12% discount from that right now. We rate the company with a High

. We assigned a narrow , but just taking a look at the stock chart here, another one where it peaked in mid-2025. In fact, at that point it was well into 1-star territory, meaning we thought it was significantly undervalued. It was an official sell recommendation on the Nov. 24, 2025, podcast. It’s down 36%. Again, this is one where it’s a 3-star-rated stock, but I still think it’s a good candidate to lock in some of those losses and use those losses to offset gains elsewhere.

Hansen: With shares falling, 4-star territory might not be too far away for Netflix. What should investors be thinking about if the stock starts trading much further below our

?

Sekera: Again, this is one where part of the reason that I picked this one out is because I do think there are probably a lot of investors out there that probably do have embedded losses that they can take. The stock is at its lowest level that it’s been over the past two years. I think you can capture some tax losses here. Now, if it trades down further from here and there’s no downward shift in our own fair value, by locking in those capital losses, you do two things today. One, you can offset those gains elsewhere, so that helps you for taxes. And two, if it trades down enough that it goes into 4- or 5-star territory, our long-term investment thesis is holding up, fair value’s unchanged, that then also gives you that dry powder to be able to repurchase those shares lower if you want.

Now, I’m no tax advisor. I do kind of have to warn people there are what’s called wash-sale rules. There is a period after you make that sale that you have to wait before you can repurchase that stock in order to use it as a capital loss against gains elsewhere. Make sure that if this is a stock or any of these stocks, if you want to buy them back at some point in time, make sure you wait long enough before you do that.

Why Progressive Stock Could Have Further to Fall

Hansen: OK. Your final stock this week to sell is Progressive PGR. Give us the key points.

Sekera: Sure. Progressive stock trades at a 10% premium, so that puts it right on the border between 2 stars and 3 stars. But either way, I still think it’s a good place maybe to look to capture some tax losses if you have them there. We rate the company with a Medium Uncertainty and a narrow economic moat.

Hansen: Let’s talk about the insurance space a little while we’re on the topic of Progressive. Morningstar considers the insurance sector to be overvalued in general. Why is that, and why is Progressive in particular one for investors to sell?

Sekera: Yeah, and we thought that the insurance sector had been pretty overvalued for quite a while now. I think it was late 2024 on the podcast when we first started to note that insurance companies as a sector were all getting to be pretty overvalued. At this point, I think for most of these insurance companies, if you bought anytime in late 2024 through most of 2025, those shares probably have some embedded capital losses in there.

Now, what happened was in 2022, 2023, and even to 2024, insurance companies were in a position that they were able to make very significant increases to their premiums. As such, they were making what we thought were excess profits at the time. Our investment thesis had been that over time, those increases would return back toward more normalized levels from those high levels of premium increases that they were able to push through. And as such, earnings growth would then start to slow.

At this point, having talked to our equity analyst, Brett, he thinks we’re now in the early stages of that slowing right now. As the market starts to see that slowing growth, that should drive a negative sentiment across the insurance space. That’s why I think a lot of these insurance stocks have further to fall before they get to the point that the market’s going to see them as being undervalued or cheap.

Subscribe to The Morning Filter on Apple Podcasts, or wherever you get your podcasts, and keep up with the latest research from hosts Susan Dziubinski and David Sekera on Morningstar.com.

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