BMO Capital analyst Jack Matten raised the firm’s price target on Lemonade (LMND) to $42 from $23 and keeps an Underperform rating on the shares. The firm believes that Lemonade’s growth will require less capital vs. personal insurance peers, given its less restricted from a rating agency perspective, the analyst tells investors in a research note. BMO adds that its base-case continues to be that Lemonade will not need a capital raise, though the stock price now reflects a best-case scenario in which Lemonade can scale profitably in highly-competitive auto insurance.
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