LA JOLLA, Calif. - Palomar Holdings, Inc. (NASDAQ:PLMR), a specialty insurance provider, has launched an underwritten public offering of 1,200,000 shares of its common stock. The company, which operates through various subsidiaries, also plans to give underwriters a 30-day option to buy up to an additional 180,000 shares.
Proceeds from the offering are earmarked for general corporate purposes, with around $25 million allocated to fund the acquisition of First Indemnity of America Insurance Company. This New Jersey-based insurance carrier specializes in surety bonds for small to medium-sized contractors, primarily in the Northeast United States.
The offering is being managed by J.P. Morgan, Evercore ISI, and Keefe, Bruyette & Woods, Inc., which are acting as joint lead book-running managers. Palomar's insurance subsidiaries, including Palomar Specialty Insurance Company and Palomar Excess and Surplus Insurance Company, hold an A (Excellent) financial strength rating from A.M. Best.
The offering is being made pursuant to a shelf registration statement filed with the Securities and Exchange Commission, which became effective upon filing on August 8, 2024. This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities, and there will be no sale of these securities in any state or jurisdiction where such an offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of any such state or jurisdiction.
In other recent news, Palomar Holdings has been the subject of several analyst updates after the company revised its 2024 operating income guidance and completed its reinsurance program.
Keefe, Bruyette & Woods maintained an Outperform rating on Palomar Holdings, raising the stock's price target to $96 from $93, based on the updated 2024 operating income guidance and changes to the reinsurance program.
Piper Sandler, on the other hand, raised its price target for Palomar to $99 from $90, following the company's announcement of the successful completion of its reinsurance program at costs lower than anticipated. This favorable reinsurance pricing led to an increase in the company's earnings guidance.
Truist Securities also adjusted its outlook on Palomar, increasing its shares target to $100 from the previous target of $97 while sustaining a Buy rating. The firm cited an increase in the earnings per share (EPS) forecast for the years 2024 and 2025 as a key reason for the price target revision.
Finally, Evercore ISI updated its outlook on Palomar shares, increasing the price target to $89 from the previous $88, reflecting a positive perspective on the company's June 1 renewals, which included better-than-expected pricing and retention for Southeast wind coverage. These recent developments highlight Palomar's proactive risk management and financial strategy, which seem to be well received by analysts.
InvestingPro Insights
As Palomar Holdings, Inc. (NASDAQ:PLMR) announces its public offering, prospective investors might be looking at the company's financial metrics and market performance to gauge the opportunity. According to the latest data from InvestingPro, Palomar's market capitalization stands at a robust $2.33 billion. The company's Price/Earnings (P/E) ratio is currently at 24.05, which is considered attractive when juxtaposed with its near-term earnings growth prospects. This is further supported by the company's significant revenue growth over the last twelve months, pegged at 27.81%, showcasing its ability to expand its financial base in a competitive market.
InvestingPro Tips highlight that Palomar has been trading at a high Price/Book multiple of 4.38, indicating strong investor confidence and a perceived value above its book worth. This aligns with the company's high return over the last year, with a 65.81% price total return, and a striking 71.06% year-to-date return, suggesting a bullish trend in its stock performance. Additionally, analysts have revised their earnings upwards for the upcoming period, which may signal further optimism regarding Palomar's profitability and financial health.
For those interested in deeper analysis, InvestingPro offers additional insights, including a total of 13 InvestingPro Tips for Palomar Holdings, Inc. These tips provide a comprehensive look at various aspects of the company's performance and projections, which could be pivotal for making informed investment decisions. Visit https://www.investing.com/pro/PLMR to explore all the available tips and metrics.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.