Jefferies maintains Buy on Skyward Specialty, target $61

On Tuesday, Jefferies reasserted a Buy rating for Skyward Specialty Insurance Group (NASDAQ:SKWD) with a steady price target of $61.00. The firm’s analysis was informed by Skyward Specialty’s preliminary fourth-quarter 2024 financial results, which surpassed expectations. The company, currently valued at $2 billion and maintaining a "GREAT" financial health score according to InvestingPro, reported earnings per share (EPS) of approximately $0.79, exceeding both Jefferies’ and consensus estimates, which were $0.68 and $0.71, respectively.

The company’s gross written premium (GPW) growth was notably double the estimates. Additionally, Skyward Specialty announced the settlement of its Loss Portfolio Transfer (LPT) agreement with R&Q Re, which led to the strengthening of LPT reserves. However, it was noted that there were no changes to the non-LPT reserves for accident years post-2018.

Looking ahead, Skyward Specialty provided an earnings guidance for 2025, projecting an EPS of around $3.45. This forecast fell short of Jefferies’ expectations but aligned with the anticipated combined ratio (CR) of approximately 91.5% and GPW growth in the low to mid-teens percentage range.

The news of the company’s better-than-expected fourth-quarter performance and the subsequent affirmation of a Buy rating by Jefferies underscores investor confidence in Skyward Specialty’s financial health and future prospects. The LPT commutation and the guidance for the coming year provide a clear picture of the company’s operational and financial trajectory as it moves forward.

In other recent news, Skyward Specialty Insurance Group has been making significant strides in its financial performance. The company recently reported a remarkable 21% growth in gross written premium (GWP) for the fourth quarter, surpassing the consensus expectations of a 13% rise. This growth is accompanied by an underlying combined ratio of 91.6%, slightly higher than the anticipated 90.2%. Skyward Specialty also disclosed a strategic move by commuting its Loss Portfolio Transfer (LPT) agreement with a reinsurer, incurring a $10 million after-tax charge in the fourth quarter.

In terms of analyst insights, William Blair affirmed an Outperform rating on the company’s stock, suggesting that Skyward Specialty’s earnings performance will continue to drive the stock’s upward movement. Similarly, JMP Securities adjusted their outlook on the company, increasing their price target from $53.00 to $60.00, maintaining a Market Outperform rating. Piper Sandler also showed confidence in the company by raising its price target to $58 from $54 while maintaining an Overweight rating.

These recent developments indicate a positive trajectory for Skyward Specialty. However, it’s important to note that these updates are based on the company’s performance and analyst projections, and actual results may vary.

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