On Tuesday, Raymond James initiated coverage on shares of Horace Mann Educators (NYSE:HMN), an insurance and retirement products provider, with a Strong Buy rating and a price target of $42.00. The firm's analysis suggests a 28% upside potential from the current trading price.
According to the coverage, Horace Mann, which focuses on the educators' market, is expected to achieve its goal of a double-digit tangible return on equity (ROE) by 2025. The analyst pointed out that the company's strategy includes strengthening property and casualty (P&C) profitability, which is anticipated to benefit from a rate increase of 10-15% in 2024.
The company's new catastrophe loss mitigation program is also expected to contribute positively. Horace Mann is described as a "fast follower" in implementing roof schedules, which have been introduced in one-third of the states it operates in. Moreover, the adoption of a predictive platform is projected to enhance pricing accuracy.
The firm's efforts are expected to significantly improve combined ratios (CRs) over the next 12 to 18 months, signaling a stronger financial position and operational efficiency. The analyst's optimistic outlook reflects the potential for these strategic initiatives to bolster Horace Mann's market standing and financial performance.
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