Palomar Holdings (PLMR) Receives Price Target Increase After Strong Q1 Earnings

Piper Sandler's Paul Newsome raised their price target on Palomar Holdings (NASDAQ: PLMR) by 1.1% from $89 to $90 on 2024/05/06. The analyst maintained their Strong Buy rating on the stock.

Newsome hiked their price target in response to Palomar Holdings' Q1 2024 earnings report, which exceeded expectations. According to Newsome, the "stronger-than-expected result was driven mainly by better-than-expected underwriting results, and the 2024 guidance bump suggests consensus estimates will rise."

For the first quarter of 2024, Palomar Holdings reported earnings per share (EPS) of $1.09, surpassing the Zacks Consensus Estimate of $0.92 and Q1 2023's EPS of $0.80 by 36.3%. The company also reported revenue of $115.53 million, beating the Zacks Consensus Estimate by 6.42% and Q1 2023's revenue of $89.06 million by 29.7%. Additionally, Palomar Holdings achieved adjusted net income of $27.8 million, marking a 36.3% increase from Q1 2023's adjusted net income of $20.4 million.

Looking ahead, Palomar Holdings' management provided guidance for FY 2024, expecting adjusted net income in the range of $113 million to $118 million. This represents a raise in the company's outlook.

Mac Armstrong, Chairman and CEO of Palomar Holdings, expressed his satisfaction with the company's Q1 performance, stating, “The strong results of our Q1 are a testament to Palomar's focus on profitable growth. We further demonstrated our ability to ‘grow where we want to’ and deliver predictable earnings." He also highlighted the growth in gross written premiums and the strong contributions from products in the Crop and Casualty categories, as well as the company's market-leading Earthquake franchise.

In response to the positive earnings report, Truist Securities analyst Mark Hughes also issued an update on PLMR on May 6, 2024. Hughes raised their price target by 10.2% from $88 to $97 and maintained their Strong Buy rating on the stock.

Currently, 75% of top-rated analysts rate PLMR as a Strong Buy or Buy, 25% consider it a Hold, and no analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that PLMR's upcoming year will deliver earnings per share (EPS) of $4.39. If the analysts' predictions hold true, PLMR's next yearly EPS will be up by 23.4% year-over-year.

In terms of stock performance, since Palomar Holdings' latest quarterly report on May 2, 2024, the stock price has increased by 7%. Year-over-year, the stock has seen a significant increase of 64.5%. During this period, PLMR has outperformed the S&P 500, which has grown by 25.2%.

Piper Sandler analyst Paul Newsome, who raised the price target on PLMR, is ranked by WallStreetZen in the top 8% out of 4,575 Wall Street analysts. Newsome specializes in the Financial Services and Consumer Defensive sectors and boasts an average return of 9.9% and a 67.9% win rate.

Palomar Holdings, Inc. is an insurance holding company that provides specialty property insurance to residential and commercial customers. The company offers various personal and commercial specialty property insurance products, including earthquake, all-risk, specialty homeowners, inland marine, hurricane, and flood insurance. Palomar Holdings distributes its products through retail agents, wholesale brokers, program administrators, and carrier partnerships. The company, formerly known as GC Palomar Holdings, was incorporated in 2013 and is headquartered in La Jolla, California.

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