William Blair analyst Adam Klauber has maintained their neutral stance on RLI stock, giving a Hold rating yesterday.
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Adam Klauber has given his Hold rating due to a combination of factors impacting RLI’s performance. The company’s second-quarter results showed operating EPS slightly above consensus estimates, but top-line growth remained flat compared to the previous year. This stagnation is primarily attributed to the property segment, which experienced a decline due to increased competition and a conservative underwriting approach.
Despite some positive developments in the casualty lines, where new business growth was noted, the overall segment growth slowed. Additionally, the company’s margins were pressured as both the expense ratio and underlying loss ratio increased. The commercial auto space, in particular, faces challenges from a hardening legal environment, which could pose risks to future earnings growth. Given these uncertainties and potential downside risks, Klauber maintains a Market Perform rating on RLI.
In another report released yesterday, Compass Point also maintained a Hold rating on the stock with a $76.00 price target.