Slide Insurance’s share price closes up 16% after falling to post-IPO low the previous day

By Keira Wingate

(The Insurer) - Slide Insurance's share price closed up 16.3% on Thursday, more than making up for its 9.5% drop on Wednesday that came even as analysts at Keefe, Bruyette & Woods (KBW) upgraded the Florida homeowners’ carrier to "outperform" pointing to a series of near-term tailwinds.

Nasdaq-listed Slide's share price closed at $14.82 on Thursday.

That followed the stock closing at $12.74 on Wednesday, down 9.5% from Tuesday’s finish.

KBW analysts in a research note sent on Wednesday wrote that Bruce Lucas-led Slide has underperformed Florida peers since its June IPO, reflecting concerns about organic growth. The stock launched at $17 a share, but during Wednesday fell to a post-IPO low of $12.53 before closing slightly higher at $12.74.

However, the KBW analysts argued that catalysts “outweigh risks here”, citing the company’s approval to assume 175,000 Citizens policies in the fourth quarter, expected softening in reinsurance costs and a $75 million buyback authorization.

The analysts lifted their 12-month target price to $19, implying a roughly 50% upside from Wednesday’s close. They acknowledged risks from a late-season storm and the potential for rate softening in Florida as capital builds, but noted seasonal patterns suggest Florida insurer stocks tend to rebound after hurricane season ends in November.

"Slide has meaningfully underperformed its peers in the three months since its IPO," analysts said in a research note. "While we attribute some of that to concerns around its organic growth strategy scrutinized against its premium valuation, its current valuation is compelling in our view, given the near-term catalyst opportunities."

They added that "Florida stocks have been relatively weak" during the first half of the hurricane season, which is from April to September.

Other property and homeowners insurers, such as Heritage Insurance, Universal Property & Casualty and HCI, traded with modest weakness yesterday, suggesting the move in Slide may be driven more by sector-wide risk sentiment, such as hurricane exposure and regulatory risk, rather than by a company-specific event.