On Wednesday, Keefe, Bruyette & Woods updated their financial outlook for Skyward Specialty Insurance Group (NASDAQ: SKWD) shares, increasing the price target to $46.00 from the previous $44.00, while reaffirming an Outperform rating.
This adjustment follows the firm's analysis of Skyward Specialty's first-quarter earnings in 2024, which surpassed expectations.
The firm's decision to raise the price target is based on an optimistic view of the company's future earnings, with revisions to the 2024 and 2025 earnings per share (EPS) estimates.
The new EPS forecasts are set at $2.80 for 2024 and $3.05 for 2025, up from the earlier projections of $2.55 and $2.85, respectively.
These revisions take into account the company's performance in the first quarter of 2024, as well as expectations for accelerated growth in earned premiums and investment income, coupled with a slight decrease in core loss ratios.
The financial institution expects Skyward Specialty to experience consistent growth in gross written premiums (GWP) and investment income.
This growth, combined with what is anticipated to be consistently conservative loss ratios and the absence of significant reserve charges, is projected to contribute to notable EPS growth in 2024 and the years following.
The firm's analysis suggests that these factors will collectively enhance the value of Skyward Specialty's shares over the next twelve months.
The price target of $46.00 is based on 15.1 times the firm's updated 2025 EPS estimate, reflecting confidence in the company's financial trajectory and potential for stock performance.
InvestingPro Insights
Following the upbeat analysis by Keefe, Bruyette & Woods, InvestingPro data echoes a positive sentiment for Skyward Specialty Insurance Group (NASDAQ: SKWD). The company boasts a market capitalization of $1.5 billion and is trading at a forward P/E ratio of 14.02, indicating a favorable valuation relative to its earnings growth. This is further supported by a robust revenue growth of 41.39% over the last twelve months as of Q1 2024.
In line with the firm's optimistic outlook, InvestingPro Tips highlight that analysts have revised their earnings upwards for the upcoming period, and the company has been profitable over the last twelve months. Notably, with a significant return of 70.26% over the past year and a strong return of 25.32% over the last three months, Skyward Specialty's financial performance has been impressive. It's important to note that the company also maintains a healthy liquidity position, with liquid assets surpassing short-term obligations.
For readers interested in a deeper analysis, InvestingPro offers 7 additional tips on Skyward Specialty, which can be accessed by visiting InvestingPro. To enhance your investing strategy, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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