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On Friday, Truist Securities expressed a positive outlook on HCI Group (NYSE:HCI) shares, as analyst Mark Hughes increased the price target from $145.00 to $155.00, while reiterating a Buy rating. Currently trading at $123.96, the stock is approaching its 52-week high of $126.50. The upward revision follows HCI Group’s robust fourth-quarter performance, which surpassed expectations despite challenges. According to InvestingPro data, the company maintains an EXCELLENT financial health score of 3.8 out of 5.
In a recent statement, Hughes highlighted HCI Group’s impressive results: "4Q Profit Despite Milton, Raising Estimates and Target (NYSE:TGT) to $155." He attributed the optimistic adjustment to a forecast for lower attritional losses and introduced a 2026 earnings per share (EPS) estimate of $14.80. The revised 2025 EPS estimate is now set at $13.90, up from the previous $12.00 estimate. The company has demonstrated strong growth, with revenue increasing by 48.7% in the last twelve months and maintaining dividend payments for 16 consecutive years.
HCI Group’s ability to significantly improve its underlying loss ratio was noted, even as the company’s management explored strategies to enhance value in its Exzeo Group technology subsidiary. Hughes’s new price target of $155 is based on the stock trading at a price-to-earnings (P/E) multiple of 10.5 times the 2026 EPS estimate. He pointed out that this valuation is still considerably below the specialty property and casualty (P&C) industry’s average P/E, which typically sits in the upper teens.
The analyst’s revised estimates and the new price target reflect confidence in HCI Group’s future performance and its potential for continued financial success. Hughes’s analysis indicates that the company’s strategic initiatives and solid financial management are likely to yield positive outcomes for shareholders.
HCI Group’s stock price movement in the coming days will likely reflect the market’s reception to Truist Securities’ updated assessment and the company’s promising financial trajectory as outlined by the firm.
In other recent news, HCI Group reported a strong financial performance for the fourth quarter of 2024. The company saw significant growth in gross premiums, which increased by over 40% for the year. Additionally, HCI Group successfully reduced its consolidated debt by $80 million and increased its book value by nearly $9 per share. The company’s operating earnings per share of $0.31 exceeded expectations, contrasting with the anticipated loss. Despite facing $78 million in losses from Hurricane Milton, HCI Group managed to outperform projections with a net loss ratio of 76%, better than the estimated 100%. Analysts at JMP raised their price target for HCI Group shares to $165, maintaining a Market Outperform rating, citing the company’s undervaluation and strong growth prospects. Furthermore, HCI Group’s expense ratio and net investment income were slightly below estimates, but the company maintained a high customer retention rate of approximately 90%. Looking ahead, HCI Group expects a combined ratio of around 75% in 2025 and is exploring strategic alternatives for its technology platform, Exio Group.
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