On Monday, Piper Sandler reiterated its positive stance on Palomar Holdings (NASDAQ:PLMR), as analyst Paul Newsome increased the price target on the company's shares to $133 from $119, while maintaining an Overweight rating. This adjustment reflects the anticipation of a favorable environment for primary insurers in 2025, influenced by recent reinsurance renewal data.
Palomar Holdings, which is known for its specialty insurance products, is among the companies with a significant dependence on reinsurance, according to the analyst. The firm's market capitalization stands at approximately $2.8 billion.
Other companies with a notable reliance on reinsurance mentioned by Newsome include Heritage Insurance Holdings (NYSE:HRTG), with a market cap of $372 million, and Skyward Specialty Insurance Group, with a market cap of $2.1 billion, both also rated Overweight by Piper Sandler.
The revised price target of $133 is based on an estimated 19 times the projected earnings per share (EPS) of $6.80 for the year 2026. Newsome's outlook suggests confidence in the company's growth potential and earnings capabilities.
However, the analyst also noted potential risks to the price target for Palomar Holdings. These risks encompass the company’s focus on very niche lines of business, which may be affected by changes in competition and regulatory adjustments. These factors could influence the company's performance and the accuracy of the price target.
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