Lemonade upgraded to Equal-weight at Morgan Stanley after investor day targets
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Lemonade (NYSE:LMND) stock jumped 6.1% in Wednesday premarket trading after Morgan Stanley upgraded the AI-powered insurance stock to Equal-weight from Underweight after the company mapped out a path to net profitability by the end of 2027 at its investor day.
In the company's ambitious growth plan, it expects to boost premiums from $1B to $10B over the next several years, through its use of technology, improving efficiency, and focusing on growth in auto insurance.
"While these targets are ambitious, management laid out specific strategies on how to achieve the growth targets through differentiated competitive advantage during the investor day," Morgan Stanley analyst Bob Jian Huang wrote in a note to clients.
The company's 2025 guidance included: 50% gross profit growth, $1.2B in in-force premiums, 40% increase in growth spend, 5% higher operating expenses, excluding customer acquisitions costs, and continued positive adjusted free cash flow.
Morgan Stanley's Equal-weight rating on Lemonade (NYSE:LMND) aligns with the SA Quant rating and the average SA Analyst rating, both at Hold, and diverges from the average Wall Street rating of Sell.
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