BMO Capital has maintained its Market Perform rating on Fidelis Insurance Holdings (NYSE: FIHL), with a steady price target of $20.00. The firm's outlook follows an adjustment of earnings estimates through 2025 and the introduction of a 2026 operating EPS forecast.
The firm's projections for Fidelis Insurance Holdings now reflect a 2% decrease in estimates through 2025. The modification is attributed to an anticipated rise in catastrophe losses and a higher expense ratio.
Despite these challenges, BMO Capital anticipates that certain factors could partially offset the negative impacts. The firm cites share repurchases and net investment income tailwinds as potential mitigating elements that could support the company's earnings.
Looking ahead to 2026, BMO Capital has introduced an operating EPS estimate of $3.72 for Fidelis Insurance Holdings. This figure stands 6% below the consensus, signaling a cautious but calculated forecast for the insurer's earnings potential in that year.
In other recent news, Fidelis reported significant growth in its earnings and revenue. The company's second-quarter results showed a robust 24.7% increase in gross premiums written, indicating a positive trend in earnings. Additionally, Fidelis announced a new $200 million share repurchase program, a move that highlights the company's strong financial position.
However, not all segments performed equally. While the Property Direct and Facultative segments demonstrated strong performance, the Aviation and Aerospace sector experienced a decline in premiums. The company has also discontinued underwriting intellectual property insurance due to inherent challenges.
Keefe, Bruyette & Woods, in their analysis, maintained an Outperform rating on Fidelis Insurance, with a steady price target of $24.00. The firm also updated its earnings per share estimates for the upcoming years, reflecting confidence in the company's future performance.
InvestingPro Insights
In light of the recent analysis by BMO Capital on Fidelis Insurance Holdings, it's worth considering additional insights provided by InvestingPro. The company's stock is currently trading at a low earnings multiple with a P/E ratio of 4.7, which is slightly higher than the last twelve months as of Q2 2024 at 4.83. This could indicate that the stock is undervalued relative to its earnings, potentially offering an attractive entry point for investors.
Moreover, Fidelis Insurance Holdings has experienced a notable price uptick, with a 43.69% return over the last six months and a 49.82% return year-to-date as of 2023. This rapid appreciation in stock price is reflected in the InvestingPro Tip that the RSI suggests the stock is in overbought territory, which investors might consider when evaluating the timing of their investments.
Despite a decline in revenue growth of -36.1% over the last twelve months as of Q2 2024, the company remains profitable with a gross profit margin of 23.95%. It's important to note that analysts predict a sales decline in the current year, which aligns with the adjustments made by BMO Capital in their earnings estimates. However, the InvestingPro platform lists additional tips that could further inform investment decisions, including insights on profitability and future performance expectations for Fidelis Insurance Holdings.
For those interested in a deeper dive, InvestingPro offers a comprehensive list of tips and metrics that could be essential for making informed decisions. There are 7 additional InvestingPro Tips available for Fidelis Insurance Holdings at https://www.investing.com/pro/FIHL, which provide a more nuanced view of the company's financial health and market position.
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