BMO Capital analyst Michael Zaremski maintained a Sell rating on Lemonade (LMND – Research Report) yesterday and set a price target of $15.00.
Michael Zaremski has given his Sell rating due to a combination of factors impacting Lemonade’s financial outlook. The company’s earnings projections for 2025 and 2026 have been revised downward, with expected losses increasing significantly. This adjustment is largely due to anticipated expenses, including those from California wildfire losses and higher interest costs associated with Lemonade’s ‘Synthetic Agents’ program.
Additionally, Lemonade’s business model presents challenges, such as a high gross expense ratio compared to its peers and a heavy reliance on reinsurance. This dependency poses a risk, especially if reinsurance becomes less available due to worsening loss ratios. Despite these issues, Lemonade’s stock price remains higher than pre-4Q24 levels, which may not be sustainable given the current financial pressures. Consequently, Zaremski maintains a target price of $15, reflecting these concerns.
In another report released on February 26, KBW also maintained a Sell rating on the stock with a $25.00 price target.
LMND’s price has also changed dramatically for the past six months – from $17.350 to $34.280, which is a 97.58% increase.
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