Palomar downgraded to Neutral from Overweight at JPMorgan

JPMorgan downgraded Palomar to Neutral from Overweight with a price target of $85, up from $79. The company’s growth strategy should generate mid-teens earnings growth and a mid-to high-70s combined ratio for the foreseeable future, better than most peers, the analyst tells investors in a research note. In addition, the firm says Palomar’s exit from wind-exposed lines should help minimize underwriting volatility and give it more flexibility to manage the cost of its reinsurance program. However, the major positive catalysts for the stock have mostly played out, contends JPMorgan. It believes that while a benign reinsurance renewal for mid-year 2024 could drive additional upside to earnings in 2024 and 2025, this already partly reflected in expectations.