BMO Capital initiates Hagerty stock with Market Perform rating, $13 target

Investing.com - BMO Capital initiated coverage on Hagerty Inc. (NYSE:HGTY) with a Market Perform rating and a $13.00 price target on Monday. According to InvestingPro data, the company has shown impressive momentum with a 39.6% return over the past six months, while maintaining a "GREAT" financial health score.

The research firm highlighted Hagerty’s differentiation in the auto insurance market through enhanced customer engagement and sticky customer relationships, contrasting with the typically commoditized and compulsory nature of standard auto insurance products.

BMO Capital noted that Hagerty is positioned to accelerate premium growth from an estimated 15% in 2024 to an average of approximately 21% between the third quarter of 2025 and the fourth quarter of 2026.

This anticipated growth acceleration stems from three key factors: an expanded relationship with State Farm, an improved economic structure with fronting carrier Markel (NYSE:MKL), and the introduction of new products.

Despite these positive growth catalysts, BMO Capital’s neutral stance is influenced by current valuation considerations and what it describes as a potential "2026 accounting-related air-pocket" that constrains its near-term bullishness on the stock.

In other recent news, Hagerty Inc. reported its second-quarter earnings for 2025, showcasing a mixed performance. The company missed earnings per share estimates, posting $0.09 compared to the expected $0.11. However, Hagerty surpassed revenue expectations, reporting $369 million against the forecasted $293.87 million, resulting in a 25.46% surprise. This revenue surge indicates strong business momentum despite the earnings per share shortfall.

Additionally, Hagerty announced a secondary offering involving 8.7 million shares of its Class A Common Stock. The shares are being offered by Hagerty Holding Corp. and Aldel LLC, with an option for underwriters to purchase an additional 1.3 million shares. Notably, Hagerty will not receive any proceeds from this sale.

In terms of analyst activity, Oppenheimer initiated coverage on Hagerty with an Outperform rating, setting a price target of $15.00. The firm highlighted Hagerty’s specialized focus on classic cars, which attracts a dedicated customer base. These recent developments reflect significant activities and analyst interest surrounding Hagerty.

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