Bullish indicating open at $55-$60, IPO prices at $37
On Tuesday, Truist Securities increased its price target for Palomar Holdings (NASDAQ:PLMR) shares from $150.00 to $178.00, while keeping a Buy rating on the stock. The adjustment comes after an evaluation of early reporting data from states that contribute significantly to Palomar’s PESIC unit revenue.
Mark Hughes, an analyst at Truist Securities, pointed out that data from five states, which represented three-fifths of Palomar E&S Insurance Company’s (PESIC) revenue last year, serves as a reliable indicator of the company’s topline growth. PESIC is a crucial part of Palomar, contributing to 45% of the total company-wide gross written premiums in 2024, which includes both admitted and non-admitted (E&S) premiums.
Palomar experienced a 33% growth in E&S premium in the first quarter of 2025 in these key states, a slight increase from 32% in the fourth quarter of 2024. This growth rate is substantially higher than the Street’s average expectation for a 21% expansion overall. Hughes believes that this performance sets Palomar up to meet or potentially exceed market expectations.
Furthermore, the analysis by Truist Securities suggests that lower reinsurance costs could positively impact Palomar’s earnings per share (EPS) by 4% in 2025. This potential for increased profitability is reflected in the revised price target and the maintained Buy rating for Palomar Holdings.
Investors will likely monitor Palomar’s future financial reports to see if the company can continue this growth trajectory and capitalize on the favorable conditions outlined by Truist Securities.
In other recent news, Palomar Holdings announced a definitive agreement to acquire Advanced AgProtection (AAP), a Texas-based Crop Managing General Agent, with the acquisition expected to close in the second quarter of this year. This strategic move is anticipated to strengthen Palomar’s position in the crop insurance market, expanding its infrastructure for future growth. In addition to the acquisition, JPMorgan upgraded Palomar’s stock rating from Neutral to Overweight, raising the price target to $150, reflecting confidence in the company’s growth trajectory. Piper Sandler also maintained an Overweight rating with a $150 price target, emphasizing Palomar’s "Palomar 2X" objective to double its size in terms of capital, premium, and net adjusted income. Keefe, Bruyette & Woods adjusted their price target for Palomar to $145 while maintaining an Outperform rating, citing the company’s strategic moves and potential for growth. The firm’s analysts expressed optimism about Palomar’s ability to achieve its ambitious goals, including doubling its adjusted underwriting profit. Palomar’s investor day provided insights into its strategy, reinforcing confidence in its capabilities to meet its 2025 earnings guidance. These recent developments highlight Palomar’s strategic direction and growth prospects in the competitive insurance market.
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