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Investing.com - Piper Sandler raised its price target on Lemonade Inc. (NYSE:LMND) to $60.00 from $55.00 on Wednesday, while maintaining a Neutral rating on the insurance technology company. The stock currently trades at $57.30, having surged over 215% in the past year according to InvestingPro data.
The firm’s analysis highlighted both bullish and bearish factors affecting Lemonade, which currently stands as the most heavily shorted name in the insurance sector with a 23.4% short interest. InvestingPro data shows the stock’s high volatility with a beta of 2.28, while maintaining strong momentum with a 54.95% return over the past six months.
Piper Sandler identified several positive factors supporting Lemonade’s outlook, including increased market interest in artificial intelligence, the company’s growth profile suggesting potential network effects, and improving profitability metrics.
Counterbalancing these strengths, the firm noted concerns about Lemonade’s valuation framework, its increased risk exposure, and the company’s reliance on direct-to-consumer channels in a market historically slow to adopt DTC insurance purchasing.
The price target adjustment follows Piper Sandler’s recent assumption of coverage on Lemonade with the same Neutral rating.
In other recent news, Lemonade Inc . reported its second-quarter earnings for 2025, exceeding revenue expectations with a total of $164 million, surpassing the anticipated $160.39 million. The company also showed a notable improvement in its gross loss ratio. Although Lemonade posted a negative earnings per share of -$0.60, it was better than the forecasted -$0.79. In analyst updates, BMO Capital raised its price target for Lemonade to $42 from $23, while maintaining an Underperform rating, citing that the company’s growth will likely require less capital compared to its peers. Jefferies also increased its price target to $37 from $30, maintaining an Underperform rating, and noted that increased premium retention could drive stronger revenue growth despite higher leverage. Both firms highlighted Lemonade’s unique position, as it is rated by Demotech rather than A.M. Best, due to having no public debt. These developments reflect ongoing shifts in the company’s financial landscape and analyst perspectives.
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