Ryan Specialty Group: Hold Rating Amidst Valuation Compression and Limited Near-Term Growth Prospects

Ryan Specialty Group (RYAN) has received a new Hold rating, initiated by Jefferies analyst, Andrew Andersen.

Andrew Andersen has given his Hold rating due to a combination of factors influencing Ryan Specialty Group’s current market position. The company is well-positioned to handle the later stages of the Excess and Surplus (E&S) cycle, with strong leadership and a significant scale that supports continued organic growth. However, recent valuation compression limits the downside potential, and there is no immediate expectation for a re-acceleration in organic growth or margin expansion, which constrains the opportunity for a re-rating.
Ryan Specialty Group’s unique position as a publicly traded, pure-play specialty intermediary allows it to leverage its scaled wholesale platform and rapidly expanding delegated authority business. Despite this, the near-term outlook for margin expansion is limited due to ongoing talent investments, which are expected to yield long-term benefits. The company maintains solid margins and free cash flow conversion rates, supporting its active mergers and acquisitions strategy. Nevertheless, the slowing growth in the E&S market poses a risk, and while Ryan Specialty Group’s shares are fairly priced, the lack of a near-term bullish outlook on the E&S market makes it challenging to adopt a more optimistic stance.

In another report released on November 20, Piper Sandler also initiated coverage with a Hold rating on the stock with a $60.00 price target.

Based on the recent corporate insider activity of 45 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of RYAN in relation to earlier this year.