On Thursday, Keefe, Bruyette & Woods adjusted its outlook on James River Group Holdings (NASDAQ:JRVR), reducing the price target from the previous $11.00 to $9.00. The firm maintained a Market Perform rating on the stock. The adjustment follows an analysis of the company's 2023 year-end financials.
The firm's examination suggests that James River's year-end 2023 GAAP loss and loss adjustment expense (LAE) reserves may have been understated by approximately $102 million, or $2.14 per share after tax. This assessment indicates that the actual reserve-adjusted year-end 2023 tangible common equity per share could be around $6.91.
This reevaluation comes in the wake of comments made by James River's CEO Frank D'Orazio during the fourth quarter 2023 earnings call. D'Orazio confirmed that the company is still exploring potential strategic alternatives. These alternatives include, but are not limited to, a potential sale, merger, or other strategic transaction.
The price target reduction reflects the firm's interpretation of James River's financial position and the potential implications for the company's valuation. The Market Perform rating indicates that the firm does not anticipate the stock to outperform or underperform the broader market average in the near term.
James River Group Holdings has not issued any public comment regarding the revised price target or the analysis of its reserves at the time of this report. The company's stock performance will continue to be monitored in light of these developments and any future strategic moves it may undertake.
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