On Monday, Truist Securities revised its price target for Kinsale Capital Group Inc (NYSE:KNSL), a specialty insurance provider, to $440 from the previous $600. Despite the reduction, the firm maintains a Buy rating on the stock. The adjustment comes after considering several factors impacting the company's financial outlook.
The firm's analyst has increased the full-year 2024 earnings per share (EPS) forecast for Kinsale Capital to $15.35, up from $15.10. This update reflects a positive performance in the first quarter and an anticipated rise in net investment income. However, this is tempered by expectations of lower reserve gains.
Looking ahead to 2025, the analyst has set the EPS estimate at $17.50, which is a decrease from the prior forecast of $18.30. This revision is based on a more conservative projection of growth in gross written premiums, now expected at 16% instead of 19%. Additionally, the anticipated favorable reserve development has been slightly reduced to 350 basis points.
The new price target of $440 is predicated on the stock maintaining its current price-to-earnings (P/E) multiple of 25 times, which is consistent with the multiples observed in high-quality peer companies like RLI (NYSE:RLI). The target also accounts for expected appreciation in the stock's value in line with earnings growth.
InvestingPro Insights
As Kinsale Capital Group Inc (NYSE:KNSL) navigates the fluctuations in the insurance market, real-time data from InvestingPro provides a deeper look into the company's financial health and stock performance. With a robust revenue growth of 45.44% over the last twelve months as of Q1 2024, the company demonstrates significant top-line expansion. The stock's P/E ratio stands at a reasonable 24.88, suggesting that it's trading at a valuation that may appeal to investors looking for growth at a reasonable price.
One of the notable InvestingPro Tips for Kinsale Capital is that the stock has raised its dividend for 9 consecutive years, indicating a commitment to returning value to shareholders. Additionally, despite recent price declines—with a one-week total return of -19.12%—the company's strong fundamentals, such as an EBITDA growth of 89.78% over the last twelve months, may catch the eye of long-term investors. For those interested in further analysis, there are additional InvestingPro Tips available, which could provide more nuanced investment insights.
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