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On Tuesday, Keefe, Bruyette & Woods, a financial services firm, raised the 12-month price target for shares of Palomar Holdings (NASDAQ: NASDAQ:) to $88, up from the previous target of $87. The firm has maintained an Outperform rating on the stock.
The adjustment follows a review of Palomar’s year-end 2023 GAAP loss triangles. The analysis revealed a modest property reserve redundancy of $1.6 million. This finding suggests that significant reserve charges are unlikely to hinder the company’s near-term earnings.
Keefe, Bruyette & Woods continues to project earnings per share (EPS) for Palomar at $4.20 for 2024 and $5.25 for 2025. These estimates are based on the assumption of no net reserve development, which refers to the changes in loss reserves that insurers must hold to pay future claims.
The firm anticipates Palomar will experience continued rapid and profitable premium growth. This growth is expected to occur within a property underwriting environment that remains favorable. Such conditions are anticipated to push the value of Palomar’s shares higher over the next 12 months.
The Outperform rating by Keefe, Bruyette & Woods indicates the firm’s belief that Palomar’s stock will perform better than the average return of the stocks the firm covers, driven by the company’s solid reserve position and growth prospects.
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