BofA upgrades Verisk after strong Q1 earnings, stock gains 3%
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Verisk (NASDAQ:VRSK) climbed as much as 3.3% on Thursday, marking its second consecutive day of gains, after the data analytics firm posted strong Q1 results, prompting Bank of America to upgrade the stock to Buy from Underperform.
"We think the shares look attractive here due to VRSK's defensive business model in an uncertain environment; accelerating sales growth, which drives our higher EPS outlook; and a more focused management and potential for higher returns following recent businesses exits," said analyst Heather Balsky.
BofA raised its 2023/24 EPS estimates for Verisk (VRSK) to $5.53/6.55 from $5.45/6.41 prior vs. $5.50/$6.41 consensus.
"Verisk (VRSK) is benefiting from a cyclical shift towards virtual claims and technology and automation investments in the P&C Insurance space, said Balsky.
As mounting losses push P&C insurers to cut costs, larger ones are generating most of their savings internally. BofA assumes they are also leveraging VRSK's tools.
Price target was raised to $243 from $167, implying 19.1% potential upside to its last close.
BofA's stance is in line with bullish sell-side ratings, but contrasts SA Quant's Hold rating.
Shares of Verisk (VRSK), which ended 7.9% higher on Wednesday after its earnings report, gained 17.1% YTD.
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