In a report released today, Pablo Singzon from J.P. Morgan maintained a Buy rating on Palomar Holdings, with a price target of $158.00.
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Pablo Singzon has given his Buy rating due to a combination of factors that suggest Palomar Holdings is poised for growth despite some challenges. The company has been experiencing slower growth in its earthquake segment, which is a significant part of its business due to higher reinsurance leverage and underwriting margins. However, Palomar is actively pursuing growth in other areas, such as casualty and crop insurance, which are expected to drive overall earnings growth.
From a valuation standpoint, Palomar’s stock has recently pulled back, making it trade below its specialty peers on future earnings. This presents an opportunity, as the market may not fully appreciate the company’s potential for earnings upside and its likely above-peer growth trajectory beyond 2027. Additionally, Palomar’s strategic exit from wind-exposed lines has reduced underwriting volatility, allowing for better management of reinsurance costs. These factors, combined with the company’s unique financial profile and growth opportunities in new lines of business, underpin Singzon’s optimistic outlook for Palomar Holdings.
Singzon covers the Financial sector, focusing on stocks such as Kinsale Capital Group, TWFG, Inc. Class A, and Palomar Holdings. According to TipRanks, Singzon has an average return of 2.7% and a 41.67% success rate on recommended stocks.
In another report released on August 6, Piper Sandler also maintained a Buy rating on the stock with a $151.00 price target.