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Investing.com - JPMorgan has reduced its price target on Palomar Holdings (NASDAQ:PLMR) to $158.00 from $170.00 while maintaining an Overweight rating on the specialty insurer. The stock, currently trading at $120.38, has experienced a notable 8.5% decline over the past week, according to InvestingPro data.
The price target adjustment follows Palomar’s second-quarter earnings report released on August 4, 2025, and the subsequent earnings call held on August 5, 2025, where management highlighted slower growth in the earthquake insurance segment.
Despite the earthquake segment slowdown, JPMorgan believes Palomar has sufficient business development initiatives, including growth in casualty and crop insurance, to maintain a similar earnings growth trajectory over the long term.
The firm noted that Palomar stock pulled back more than 15% immediately after the earnings announcement, though it has regained some ground since then, leaving it trading below specialty insurance peers on 2027 earnings multiples.
JPMorgan maintains that the current valuation does not adequately reflect potential upside in earnings for 2025 and 2027, which have already been adjusted lower, nor does it account for Palomar’s likely above-peer growth trajectory beyond 2027.
In other recent news, Palomar Holdings reported strong financial results for the second quarter of 2025, exceeding analyst expectations. The company announced earnings per share of $1.76, surpassing the anticipated $1.67, and reported revenues of $496.3 million, which was 8.1% above projections. Despite these robust results, Piper Sandler lowered its price target for Palomar to $151 from $177, citing concerns over a higher-than-expected expense ratio, though they maintained an Overweight rating. Similarly, Keefe, Bruyette & Woods reduced their price target to $172 from $204, maintaining an Outperform rating. The firm attributed the adjustment to "unusual seasonality" affecting the interpretation of Palomar’s strong earnings. These developments highlight a mixed sentiment among analysts regarding Palomar’s financial performance and future prospects. Investors are advised to consider these recent updates when evaluating the company’s stock.
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