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On Tuesday, Keefe, Bruyette & Woods (KBW) analyst Meyer Shields adjusted the price target for Selective Insurance Group (NASDAQ:SIGI) to $92.00 from the previous $93.00. Despite the change, Shields retained a Market Perform rating on the company’s stock.
The revision follows Selective Insurance Group’s first-quarter earnings report for the year 2025, which did not meet KBW’s initial projections. Shields noted the earnings underperformance and anticipated higher core loss ratios, which are expected to be somewhat mitigated by lower catastrophe losses. As a result, the estimated earnings per share (EPS) for 2025 and 2026 have been revised downwards to $7.05 and $8.35, respectively, from the prior estimates of $7.60 and $8.45. According to InvestingPro data, three analysts have recently revised their earnings estimates downward, though net income is still expected to grow this year.
The analyst pointed out that the company’s conservative approach to casualty loss picks, particularly in general liability and workers’ compensation, is likely to dampen earnings for the next two years. Shields also suggested that it would take time for Selective Insurance’s stock multiple to recover to its former premium level compared to its peers. This recovery is contingent on the absence of additional reserve surprises, which could otherwise impact the stock’s performance. The company’s current P/E ratio of 23.79 reflects these challenges, though InvestingPro analysis suggests the stock is slightly undervalued at current levels.
The current valuation of Selective Insurance’s shares is based on an 11.0x multiple of the firm’s projected 2026 earnings per share. The updated price target reflects KBW’s expectations for the company’s financial outlook and stock potential in the near term.
Selective Insurance Group’s performance and strategic decisions in the coming quarters will be closely watched by investors as they assess the company’s ability to navigate the challenges outlined by KBW and improve its market position.
In other recent news, Selective Insurance Group reported its first-quarter 2025 earnings, which showed mixed results. The company posted earnings per share (EPS) of $1.76, which fell short of analysts’ expectations of $1.88. However, revenue exceeded forecasts, coming in at $1.29 billion compared to the anticipated $1.25 billion. Despite the EPS miss, net income available to common stockholders increased by 34%, and the company continues to focus on technology and AI investments to drive growth. BMO Capital Markets recently raised its price target for Selective Insurance Group to $96 from $92, maintaining an Outperform rating. The firm cited confidence in the company’s ability to manage higher catastrophe losses and other financial challenges. Analyst Michael Zaremski noted that while estimates were lowered by 2% through 2026, a 3% increase is projected for the same year as margins are expected to revert closer to historical averages. These developments reflect the company’s strategic efforts to navigate a challenging financial environment.
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