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On Wednesday, Keefe, Bruyette & Woods (KBW) adjusted its outlook on Skyward Specialty Insurance Group (NASDAQ: SKWD), increasing the price target from $67.00 to $72.00. The firm upheld its Outperform rating for the insurance company’s stock. KBW’s analyst, Meyer Shields, cited a review of the year-end statutory loss and defense and cost containment expense reserves as the basis for this adjustment. The review revealed an $85 million overall redundancy, which surpassed the previously estimated $56.5 million redundancy based on less detailed year-end 2024 GAAP loss triangles.
Shields stated that despite the change in price target, the firm’s earnings per share (EPS) estimates for 2025 and 2026 remain unchanged at $3.60 and $4.20, respectively. Furthermore, KBW introduced an initial EPS estimate for 2027 at $4.70, reflecting expectations for a continued, albeit decelerating, above-average top-line growth and very modest underwriting margin compression.
The positive assessment of Skyward Specialty’s reserve strengths reflects the company’s robust financial health and potentially favorable future performance. The $85 million redundancy indicates that the company has set aside more funds than necessary to cover its insurance claims and expenses, which could be seen as a sign of prudent financial management. This is further supported by InvestingPro’s Financial Health Score of 3.54 out of 5 (rated as "GREAT"), with particularly strong scores in price momentum and growth. The company maintains a healthy current ratio of 1.9, indicating strong liquidity, and has achieved a 26.3% revenue growth in the last twelve months.
The firm’s analysis supports a belief in the insurance group’s ability to maintain growth and manage underwriting margins effectively. The introduction of a 2027 EPS estimate suggests a long-term confidence in Skyward Specialty’s business strategy and financial planning. The company’s gross profit margin stands at 27.85%, while its return on equity is 16%, demonstrating solid operational efficiency.
Skyward Specialty Insurance Group has not publicly responded to the updated price target and maintained rating. The market’s reaction to KBW’s revised price target and the maintained Outperform rating will unfold as investors and other stakeholders consider the implications of the firm’s findings and expectations.
In other recent news, Skyward Specialty Insurance Group Inc. reported impressive financial results for the first quarter of 2025, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.90, significantly higher than the forecasted $0.68, while revenue reached $328.53 million, exceeding the expected $274.57 million. This marks the highest net income in the company’s history at $42 million. Additionally, Skyward Specialty announced a leadership transition, appointing Corey LaFlamme as President of Captives & Specialty Programs, with Kirby (NYSE:KEX) Hill transitioning to Chairman of the same divisions. The company’s shareholders also elected Marcia Dall and Anthony J. Kuczinski as directors and approved Ernst & Young LLP as independent auditors for the fiscal year ending December 31, 2025. Skyward Specialty’s strategic expansion included adding agriculture and credit insurance to its offerings, contributing to a 17% increase in gross written premiums. Analyst firms such as Barclays (LON:BARC) and Truist Securities have taken note of the company’s robust performance and strategic initiatives.
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