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Investing.com - Keefe, Bruyette & Woods lowered its price target on Palomar Holdings (NASDAQ:PLMR) to $172.00 from $204.00 on Friday, while maintaining an Outperform rating on the insurance company’s stock.
The research firm cited "unusual seasonality" that it believes is masking what it considers very strong results from Palomar’s second-quarter 2025 earnings report.
KBW raised its earnings per share estimates for Palomar to $7.05 for 2025, $8.65 for 2026, and $9.85 for 2027, up from previous forecasts of $6.80, $8.40, and $9.70, respectively.
The revised estimates incorporate Palomar’s second-quarter outperformance and assume higher annual net-to-gross earned premium ratios, lower core loss ratios, and more reserve releases, partially offset by lower premium growth and higher expense ratios.
Despite the price target reduction, KBW expects Palomar shares to outperform as investors recognize the company’s "underlying strong profitable growth" beyond what it described as cyclical fluctuations in loss ratio and premium metrics.
In other recent news, Palomar Holdings reported its financial results for the second quarter of 2025, surpassing analyst forecasts with an earnings per share (EPS) of $1.76, compared to the anticipated $1.67. The company also achieved revenues of $496.3 million, exceeding projections by 8.1%. Despite these strong earnings and revenue results, Piper Sandler adjusted its price target for Palomar to $151 from $177, while maintaining an Overweight rating. This adjustment was due to concerns over a higher-than-anticipated expense ratio, which affected underwriting results. Piper Sandler’s own EPS projection of $1.69 was also exceeded by Palomar’s reported EPS. These developments reflect ongoing investor concerns over broader market conditions and specific challenges faced by the company.
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