BMO Capital trimmed its price objective for Verisk Analytics to $224 from $233 but left its Outperform rating intact. The move comes against a backdrop in which the stock is trading at $185.02, well below the revised target, and has fallen 17.7% year-to-date and 37.4% over the past year.
Analysts at BMO highlighted that adjusted earnings per share exceeded expectations, attributing the beat primarily to margin strength. Underlying subscription revenue continued to grow, described as solid by the firm, though that growth has slowed slightly versus a tougher year-earlier comparison. Transactional revenue has declined again, adding a source of near-term revenue pressure.
Gross profitability remains a bright spot. Data from InvestingPro indicates Verisk reported an impressive gross profit margin of 69.9%, a metric BMO and other market participants cite when assessing the companys operating leverage and earnings durability.
On guidance and structural considerations, BMO said the companys 2026 outlook looks better than initially presented once the impact of the Verisk Marketing Solutions divestiture is taken into account. That divestiture represents an approximate 200 basis point headwind. In addition, BMO noted guidance factors in some tuck-in merger and acquisition activity beginning in 2025. The firms margin-growth planning also adjusts for foreign-exchange tailwinds expected in 2025.
Management has signaled confidence in sustaining pricing despite a deceleration in the broader property and casualty insurance market. Company executives told analysts they view Verisks proprietary data assets as highly defensible in an environment shaped by artificial intelligence, a point BMO referenced when discussing competitive positioning.
Despite lowering the price target, BMO raised its internal estimates for Verisk Analytics, reflecting a reassessment of revenue and margin drivers while recalibrating valuation assumptions.
Other analysts and corporate developments have also influenced the market narrative. In recent coverage moves, BMO Capital previously upgraded Verisk from Market Perform to Outperform and maintained a $233.00 price target in that commentary. Separately, BofA Securities reinstated coverage on the company with a Neutral rating and a $205.00 price objective.
On the leadership front, Verisk appointed Steven Kauderer as president of its Claims Solutions business. Kauderer, who brings more than three decades of experience, will report directly to Lee Shavel, Verisks president and chief executive officer.
Market positioning amid sector volatility has also been noted by other firms. RBC Capital Markets pointed to Verisk as an attractive investment opportunity following a GenAI-driven selloff that affected Information Services and Exchanges stocks. RBC highlighted Verisks limited disruption risk from GenAI given its proprietary data and deep integration within client workflows.
The combination of strong margins, subscription resilience, transactional declines, a strategic divestiture with a roughly 200 basis point impact, and ongoing M&A assumptions in guidance builds a nuanced near-term picture for Verisk. The stocks current market price sits well below multiple analyst targets, leaving valuation and sentiment as focal points for investors assessing the companys medium-term trajectory.