BMO Capital lowered its 12-month price target on Kinsale Capital Group Inc. (NYSE:KNSL) to $418 from $466 and retained a Market Perform rating on the shares. The analyst action accompanies a downward revision to earnings-per-share projections of roughly 5% through 2027, reflecting tempered growth assumptions that BMO says will pressure underwriting income and net investment income.
The firm described consensus growth projections for 2026 as a high hurdle in the current operating environment and expects the stock to trade in a range as growth decelerates. BMO’s move is consistent with broader analyst activity: InvestingPro data cited in the firm’s note indicates six analysts have reduced earnings estimates for the company for the upcoming period.
Despite those growth concerns, Kinsale’s valuation and core operating metrics remain notable. The company trades at a price-to-earnings ratio of 17.46 and a PEG ratio of 0.79, figures that BMO and InvestingPro interpret as implying the stock is trading below its growth-adjusted value. The analyst also highlighted Kinsale’s strong underwriting performance, pointing to market-leading combined ratios and robust returns on equity.
Operational strength is evident in recent results. Kinsale reported fourth-quarter 2025 earnings per share of $5.81, ahead of the Wall Street projection of $5.26, a positive surprise of 10.46%. Revenue for the quarter came in at $483.27 million, materially above the expected $391.95 million. Those outcomes underline the company’s capacity to exceed consensus expectations in its most recent reporting period.
At the same time, BMO’s note stresses that superior operating metrics do not eliminate near-term headwinds tied to slower top-line and investment income growth. The firm pointed to a 29% return on equity for the last twelve months and highlighted an InvestingPro Financial Health Score of 3.1 out of 5, characterized as "GREAT" within that platform’s framework. InvestingPro’s Fair Value analysis, cited by the analyst, also suggests the shares may be undervalued at current market levels.
Investor reaction to the earnings beat was muted: despite the strong quarter, Kinsale’s stock slipped in premarket trading. BMO expects the share price to remain rangebound while growth moderates, reflecting the firm’s assessment that the consensus growth outlook for 2026 will be difficult to meet under prevailing conditions.
For investors seeking deeper analysis, Kinsale’s full Pro Research Report is available through InvestingPro, part of a library covering more than 1,400 U.S. equities. The price target reduction from BMO encapsulates the firm’s view that slowing growth - rather than operational weakness - is the principal constraint on upside from current levels.
Key financial metrics and recent results
- New BMO price target: $418 (previously $466)
- EPS estimates cut about 5% through 2027
- P/E ratio: 17.46; PEG ratio: 0.79
- Return on equity (last twelve months): 29%
- InvestingPro Financial Health Score: 3.1 out of 5 (labelled GREAT)
- Q4 2025 EPS: $5.81 vs. $5.26 expected (10.46% beat)
- Q4 2025 revenue: $483.27 million vs. $391.95 million expected
Implications
BMO’s adjustment emphasizes a tension facing Kinsale: sturdy underwriting outcomes and capital returns on one hand, and a more constrained growth outlook on the other. The firm’s view that consensus growth forecasts for 2026 are ambitious underscores the role that macro and market conditions may play in limiting underwriting and investment income expansion.