Neptune Insurance initiated with an Underperform at Mizuho

Mizuho initiated coverage of Neptune Insurance (NP) with an Underperform rating and $23 price target which offers 13% downside potential. The company’s margins and unit economics are “group-leading,” but have less room for further improvement, the analyst tells investors in a research note. The firm believes Neptune’s low quote-to-bind ratio, questions over the company’s generated loss experience relative to the private market’s, required returns by third-party capacity providers, and questions over the future of the National Flood Insurance Program create downside risk for the shares.