On Thursday, Hamilton Insurance Group (NYSE: HG) saw its price target increased to $22.00 from $21.00 by JMP Securities, while the firm maintained a Market Outperform rating for the stock. The adjustment follows Hamilton's release of fourth-quarter results that surpassed expectations.
The insurance company reported an operating earnings per share (EPS) of $0.86, excluding a tax benefit, which was significantly higher than the analyst's projection of $0.54 and the consensus estimate of $0.65.
The better-than-expected performance was largely attributed to increased net investment income (NII), which came in at $120 million against an estimated $63 million, contributing to a $0.53 EPS beat. Moreover, the company experienced lower catastrophe losses of $6.5 million compared to the anticipated $18.6 million, providing a further $0.11 EPS advantage.
These positive factors were slightly offset by higher corporate expenses, which totaled $44.9 million, exceeding the estimate of $19.0 million. The unexpected rise in expenses was primarily due to increased compensation costs linked to the company's strong annual results.
Furthermore, a non-controlling interest expense of -$6.5 million was reported, whereas none had been estimated, resulting in a $0.16 EPS shortfall.
Hamilton Insurance also saw a robust 27% increase in gross written premiums for the quarter, easily outpacing the modest 1% growth that had been predicted. This surge in premiums was driven by significant growth in its International segment, which expanded by 17% against an expected decline of 10%. The Bermuda/Reinsurance segment also experienced substantial growth, with a 50% increase compared to the projected 26% rise.
The company's book value stood at $18.58 as of December 31, which, while below the analyst's estimate of $19.32, marked a 7% sequential rise from September 30. This financial indicator, coupled with the strong quarterly performance, underpins JMP Securities' decision to raise the price target for Hamilton Insurance Group shares.
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