Keefe, Bruyette & Woods moved Neptune Insurance Holdings (NYSE: NP) up to an Outperform rating from Market Perform and reduced its price target to $25.00 from $26.00 following the company’s fourth-quarter results.
The upgrade was anchored on Neptune’s fourth-quarter adjusted EBITDA of $26 million, which topped both the firm’s internal estimate and consensus expectations of $24 million. Keefe, Bruyette & Woods attributed the outperformance to stronger revenue during the quarter.
InvestingPro data cited in the company’s reporting shows Neptune’s last twelve months of EBITDA at $85.05 million and a gross profit margin of 65.77%. Those figures were referenced in the broker note as context for the firm’s revised view.
Neptune’s fourth-quarter organic growth accelerated to 39%, well above the 25% consensus projection. The note from Keefe, Bruyette & Woods said that growth received a modest contribution from a government shutdown that paused National Flood Insurance Program business, as well as from temporary agent incentives.
Company management responded to the quarter by raising its fiscal 2026 guidance for both revenue and adjusted EBITDA by approximately 2% each, citing what it called strong core business trends. In turn, Keefe, Bruyette & Woods increased its own adjusted EBITDA estimates by 4%.
The firm also trimmed the valuation multiple it applies to Neptune, moving from 36 times to 32 times adjusted EBITDA as part of its updated model. The analyst upgrade comes after Neptune’s stock had declined over the prior two weeks amid investor concern about potential disruption from artificial intelligence in the insurance sector.
In a separate analyst move, BMO Capital also upgraded Neptune from Market Perform to Outperform. BMO’s commentary highlighted operational efficiency, noting an expected revenue per employee figure of $2.6 million by 2025—far higher than the cited peer metric for WTW of roughly $200,000 per employee.
Despite the favorable rating change, BMO lowered its price target for Neptune from $25.00 to $20.00. The firm’s actions signal confidence in Neptune’s operational metrics while reflecting a more conservative view on valuation.
Together, the two broker notes underline investor attention to Neptune’s profit conversion, margin profile and productivity metrics, even as market participants weigh sector risks such as potential AI-related disruption and the transitory elements that helped boost recent growth.
Below is a concise view of the latest analyst developments and company metrics as presented by the firms.
- Keefe, Bruyette & Woods: Upgraded to Outperform; price target $25.00 (prior $26.00); fourth-quarter adjusted EBITDA $26M vs. $24M estimate/consensus; LTM EBITDA $85.05M; gross profit margin 65.77%; Q4 organic growth 39%; adjusted EBITDA estimates raised 4%; valuation multiple lowered from 36x to 32x.
- BMO Capital: Upgraded to Outperform; price target lowered to $20.00 from $25.00; emphasized revenue-per-employee projected at $2.6M by 2025 versus WTW’s ~ $200,000 per employee.