KNSL - BMO upgrades Kinsale Capital to Outperform on 'compelling' growth outlook

2023-06-02 09:08:24 ET

BMO Capital on Friday upgraded Kinsale Capital ( NYSE: KNSL ) to Outperform from Underperform, given "a compelling growth outlook" due to structural expense advantage and robust inflows into the excess and surplus lines insurance marketplace.

"We made a rookie mistake earlier this year; underappreciating KNSL's glaring competitive advantages and hinging our prior Underperform thesis on an 'expensive valuation'," said analyst Michael Zaremski. "KNSL is expensive vs. peers since peers exhibit meaningfully lower profit growth outlooks."

After recent meetings with Kinsale's ( KNSL ) management, BMO concluded that KNSL will continue exhibiting over 30% revenue growth rates through 2024. "KNSL's lower expense structure is multi-faceted and therefore tough for competitors to mimic."

EPS estimates for 2023/2024 were raised to $10.80/$14.40 from $10.31/$12.40 ($10.30/$12.24 consensus ). Price target was raised to $389 from $270, implying 24.5% potential upside to KNSL's last close.

BMO's stance contrasts sharply with Hold ratings by SA Quant as well as sell-side analysts .

More on Kinsale Capital

• Kinsale Capital reports better-than-expected Q1 earnings
• Kinsale: Accretive Growth Through Integrated Commercial Focus

For further details see: