Palomar Holdings (PLMR) Beats Expectations with Q1 Earnings and Raises FY Outlook

Truist Securities's Mark Hughes raised their price target on Palomar Holdings (NASDAQ: PLMR) by 10.2% from $88 to $97 on May 6, 2024. The analyst maintained their Strong Buy rating on the stock. This comes after Palomar Holdings delivered better-than-expected results in the first quarter of 2024 and management increased its expected earned premiums. Hughes noted that management's expected 19x profits are at the higher end of the spectrum compared to its specialized property and casualty peers.

For the first quarter of 2024, Palomar Holdings reported earnings per share (EPS) of $1.09, beating the Zacks Consensus Estimate of $0.92 by 36.3%. This also represented a significant increase of 36.3% compared to the first quarter of 2023, which had EPS of $0.80. The company's revenue for Q1 2024 came in at $115.53 million, surpassing the Zacks Consensus Estimate by 6.42% and showing a robust 29.7% growth compared to the same period last year.

Palomar Holdings also reported adjusted net income of $27.8 million for the first quarter of 2024, marking a 36.3% increase from Q1 2023's $20.4 million. Looking ahead to the full year of 2024, management provided guidance of adjusted net income in the range of $113 million to $118 million, indicating a raise from previous expectations.

Chairman and CEO Mac Armstrong expressed his satisfaction with the company's strong performance in Q1. He highlighted Palomar's focus on profitable growth and its ability to deliver predictable earnings. Armstrong pointed out that the company's five product categories, including Crop and Casualty, contributed to a remarkable gross written premium growth of 47.2%. Additionally, the company's market-leading Earthquake franchise experienced an 18% growth on a same-store basis. These factors drove adjusted net income growth of 36.3% and an adjusted return on equity of 22.9%. Armstrong emphasized that Palomar's specialty insurance products are well positioned to support its outlook for the full year, which has been raised.

Piper Sandler's Paul Newsome also issued an update on PLMR on May 6, 2024. The analyst raised their price target by 1.1%, from $89 to $90, and maintained their Strong Buy rating on the stock.

Currently, 75% of top-rated analysts rate PLMR as a Strong Buy or Buy, while 25% see it as a Hold. No analysts either recommend or strongly recommend selling the stock. The consensus forecast among analysts is that PLMR's upcoming year will deliver earnings per share (EPS) of $4.39. If the analysts' predictions hold true, this would represent a 23.4% increase on a year-over-year basis.

Since Palomar Holdings' latest quarterly report on May 2, 2024, the stock price has risen by 7%. Looking at the year-over-year performance, the stock is up by an impressive 64.5%. During this period, PLMR has outperformed the S&P 500, which has shown a 25.2% increase.

Mark Hughes, the Truist Securities analyst who raised the price target on PLMR, is ranked in the top 2% out of 4,575 Wall Street analysts by WallStreetZen. Hughes specializes in the Energy, Healthcare, and Financial Services sectors and boasts an average return of 21.5% and a 79.8% win rate.

Palomar Holdings, Inc. is an insurance holding company that provides specialty property insurance to residential and commercial customers. The company offers a range of personal and commercial specialty property insurance products, including earthquake, all-risk, specialty homeowners, inland marine, hurricane, and flood insurance. It markets and distributes its products through various channels, including retail agents, wholesale brokers, program administrators, and carrier partnerships. Palomar Holdings, Inc. was founded in 2013 and is headquartered in La Jolla, California.

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