Evercore ISI has resumed coverage of Palomar Holdings (NASDAQ: PLMR), assigning an Outperform rating and establishing a $150.00 price target. That assessment is consistent with a broader analyst view that remains positive on the specialty insurer, with published targets spanning $151 to $171.
Valuation and growth indicators
Evercore pointed to what it views as a favorable risk-reward profile. The research firm noted Palomar is trading near the lower bound of its historical valuation band while presenting potential for earnings growth that could exceed current consensus estimates. Key valuation figures cited include a price-to-earnings ratio of 19.6 and a price/earnings-to-growth (PEG) ratio of 0.37, metrics that InvestingPro data indicate reflect a discount relative to the company’s projected growth trajectory.
Business model emphasis - reinsurance arbitrage
Evercore emphasized Palomar’s reinsurance arbitrage approach as a distinct competitive feature. The insurer cedes more than 50% of its premiums through reinsurance structures, a strategy the firm argues has increasing relevance as the property and casualty market softens.
While the analyst acknowledged headwinds in certain lines, it expects favorable property reinsurance market conditions to help offset pressure. Commercial earthquake and property business together account for roughly 40% of Palomar’s gross premiums written, and Evercore flagged that pricing challenges are anticipated in those areas.
Growth forecast and drivers
Evercore’s model projects 24% growth in gross premiums written for 2026, outpacing a consensus view of 21%. The firm attributes its higher projection to multiple factors: recruitment of new sales personnel, expansion initiatives in crop and surety segments, continued rate gains in casualty lines, and potential partnerships that could broaden access to residential earthquake business.
Recent corporate actions and financing
Palomar recently completed the acquisition of The Gray Casualty & Surety Company, with the transaction formally closed on January 31. To fund the deal, Palomar secured $450 million in unsecured financing, comprised of a $150 million revolving facility and a $300 million term loan. The sale represented an exit for private equity backer BCP, which had held Gray Surety since 2021.
Other analyst activity
In addition to Evercore’s resumed coverage, Keefe, Bruyette & Woods increased its price target for Palomar to $170 while keeping an Outperform rating. KBW’s revised target is based on a multiple of 19.3 times its updated 2026 earnings-per-share estimate and follows Palomar’s third-quarter 2025 earnings disclosure and conference call.
Near-term catalyst
Investors should note Palomar is scheduled to report earnings in two days, on February 11, which represents an immediate catalyst for the stock and could influence near-term sentiment.