On Monday, Piper Sandler, a notable investment firm, increased its price target for Palomar Holdings (NASDAQ:PLMR) to $119 from the previous $110, while retaining an Overweight rating on the stock. The adjustment reflects a new valuation multiple that aligns more closely with the company's peers in the market.
The firm's analyst based the revised price target on a multiple of approximately 17 times the forward (2026E) earnings estimate of $6.80 per share. This is an increase from the previously used multiple of around 16 times the same earnings estimate. The decision to raise the multiple comes as a result of comparative analysis with peer companies, which are currently trading at an average multiple of 17.3 times earnings.
Palomar Holdings, a specialty insurance company, is being valued by Piper Sandler with a forward-looking perspective, focusing on the company's expected performance in the year 2026. The Overweight rating suggests that the analyst believes Palomar shares will outperform the average return of the stocks covered in the sector over the next 12 to 18 months.
The new price target of $119 represents a potential upside from the company's previous target and indicates the firm's confidence in Palomar's future growth prospects. The analyst's approach underscores the importance of peer comparison in the evaluation process, ensuring that Palomar's stock is assessed within the context of the broader market performance.
Investors and market watchers may consider this revised target and rating as a sign of Piper Sandler's optimism about Palomar's long-term earnings potential and its competitive stance within the insurance industry.
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