Morgan Stanley upgraded Lemonade to Equal Weight from Underweight with a price target of $42, up from $23, following the investor day.

Lemonade shares jumped 7.4% in premarket trading.

Lemonade “charted an ambitious goal” of growing its business from $1B in premiums to $10B over the next few years, the analyst tells investors in a research note.

The firm adds the company charting a path to net profit positive exiting 2027, which is significantly more optimistic than consensus estimates. It believes the next phase of Lemonade’s growth will be driven by its “differentiated” technology.