Analysts have lowered their price target for Selective Insurance Group from approximately $83.33 to $81.50. They cite concerns about weaker revenue growth, softer profit margins, and increased reserve risks in the commercial auto segment.
Analyst Commentary
Recent analyst reports reveal a range of perspectives on Selective Insurance Group's outlook. While some see areas of resilience, most express caution, citing industry and company-specific challenges.
Bullish Takeaways
- Bullish analysts note that price targets, while adjusted, still imply some potential upside from current levels. This reflects steadier elements of the business.
- Despite sector headwinds, commercial property and casualty markets are showing signs of stabilization according to some researchers.
- Recent analyst actions suggest some improvements in the firm's underlying valuation, particularly through minor upward adjustments in price estimates.
Bearish Takeaways
- Bearish analysts express concern over persistent weakness in revenue growth and ongoing pressure on profit margins.
- There is heightened caution regarding reserve risks, with particular focus on the commercial auto segment. Future reserve "potholes" are perceived as significantly higher than in the past.
- Following recent quarterly results, multiple analysts have reduced estimates due to deterioration in core loss ratios and slower growth in premiums and net interest income.
- The stock is anticipated to stay in a valuation "penalty box" given continued reserve additions and broader industry headwinds.
What's in the News
- Selective's Board of Directors declared a quarterly cash dividend of $0.43 per common share, payable December 1, 2025, to holders of record on November 14, 2025 (Key Developments).
- Between July 1, 2025 and October 22, 2025, the company repurchased 464,701 shares for $36.2 million. This completed the repurchase of 1,019,252 shares for $80.94 million under the existing buyback plan (Key Developments).
- Selective Insurance Group announced a new share repurchase program authorizing up to $200 million in buybacks with no expiration date (Key Developments).
- The Board of Directors authorized a new buyback plan on October 22, 2025 (Key Developments).
Valuation Changes
- Consensus Analyst Price Target has decreased from $83.33 to $81.50, reflecting a modest reduction in overall valuation expectations.
- Discount Rate remains unchanged at 6.78 percent. This indicates no shift in perceived risk or expected return.
- Revenue Growth projection has fallen from 6.32 percent to 5.89 percent. This shows a slight downward revision in expected top-line expansion.
- Net Profit Margin is slightly lower, moving from 9.86 percent to 9.79 percent. This signals a minor contraction in anticipated profitability.
- Future P/E ratio has declined from 10.22x to 9.63x. This suggests decreased investor optimism about future earnings multiples.
Disclaimer
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