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On Tuesday, Keefe, Bruyette & Woods analyst Tommy McJoynt updated the firm’s outlook on Hamilton Insurance Group (NYSE: HG), raising the price target to $25 from $23 while retaining an Outperform rating on the shares. The adjustment reflects a mixed revision of the company’s earnings projections, citing impacts from the California wildfires and an improved earnings forecast for the following year.
The analyst noted that the expected hit from the California wildfires led to a reduction in the estimated earnings per share (EPS) for the year 2025 to $2.74, down from the previous estimate of $3.89. The wildfires are anticipated to have a $1.25 per share impact at the midpoint of the expected range. Despite the near-term setback, the analyst raised the 2026 EPS estimate to $4.63, up from the prior $4.52 forecast, driven by a slightly lower core combined ratio. This outlook aligns with InvestingPro’s analysis, which shows robust revenue growth of 48% in the last twelve months.
The new price target of $25 is founded on a valuation of 1.1 times the book value, which is an increase from the 0.95 times year-end 2025 book value previously estimated. It also represents 5.4 times the firm’s projected 2026 earnings. The analyst expressed confidence in the company’s ability to achieve a mid-teens return on equity (ROE), which supports a valuation at or above book value.
McJoynt emphasized the potential for Hamilton Insurance stock to experience a positive re-rating as the company continues to demonstrate strong execution in its operations. The analyst highlighted the company’s robust underwriting capabilities, which are expected to yield double-digit premium growth and adequate loss reserving.
In conclusion, the analyst reiterated the Outperform rating on Hamilton Insurance Group, suggesting that there is approximately a 20% potential upside to the stock based on the revised targets and expectations.
In other recent news, Hamilton Insurance Group reported its Q4 2024 earnings, revealing a significant shortfall in expected earnings per share (EPS). The company’s actual EPS was $0.32, falling short of the forecasted $0.71. Despite this, Hamilton Insurance saw a 55% increase in full-year net income compared to the previous year, highlighting strong financial performance. The company recorded revenue of $543.94 million, significantly surpassing the forecast of $25.1 million. Gross premiums written reached $2.4 billion, marking a 24% increase year-over-year. Hamilton also achieved record underwriting income and an improved return on equity, which rose to 18.3% from 13.9% in 2023. On the analyst front, JMP Securities recently raised the price target for Hamilton Insurance Group shares to $27.00, up from $25.00, maintaining a Market Outperform rating. Additionally, Hamilton’s management provided an initial estimate for first-quarter losses due to the LA wildfires, projecting a net impact of $120 million to $150 million.
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