BMO taking ‘some chips off the table,’ downgrades Ryan Specialty Group

As previously reported, BMO Capital downgraded Ryan Specialty Group (RYAN) to Market Perform from Outperform with a price target of $49, down from $53. The firm is lowering its forward EPS estimates by about 2% given its expectation for Q3 organic growth to decelerate due to property seasonality dynamics, which it says “are on steroids in recent years due to property pricing being multiples higher than non-property pricing.” The firm estimates this will lead to Ryan Specialty’s Q3 organic growth missing consensus forecasts by 350 basis points and argues that this negative seasonality could cause “growth-y investors to negatively react,” similar to what was seen with Kinsale Capital (KNSL), so it is “taking some chips off the table.”