As previously reported, Evercore ISI analyst David Motemaden downgraded Palomar to In Line from Outperform with a $52 price target. His estimates are 5% below consensus over the next few years, as he estimates a worse than consensus ULR, higher reinsurance costs and catastrophe losses, Motemaden tells investors. The stock has underperformed over the last two years, but he struggles to see the stock outperforming over the next 12 months given "the reinsurance regime change that is unfolding," said Motemaden. He estimates that Palomar’s consolidated cost of reinsurance will be up 20-30%, while its potential to increase rates on its book of business is in the 15-20% range, the analyst added.
Published first on TheFly
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