Why Investors Found Lemonade Stock Sour on Wednesday
Operating at the intersection of two out-of-favor sectors -- tech and finance -- Lemonade (NYSE: LMND) was not a hit with investors on Wednesday. They traded the next-generation insurer's stock down by almost 4.5%, which represented a steeper fall than the S&P 500 index's 1.6%. That gloomy sentiment was exacerbated by an analyst's price-target cut that morning.
That person was Piper Sandler's (NYSE: PIPR) Arvind Ramnani, who shaved $1 off his estimation for Lemonade's value. He now feels the stock is worth $19 per share, and while cutting the price target, he maintained his neutral recommendation.
Ramnani made his move because of inflation. Although the latest statistics indicate that this is being tamed somewhat, the analyst wrote that it has worsened Lemonade's loss ratio of late. He added that 2023 should represent a transitional year for the insurer as it drives toward profitability and ramps up the cross-selling of its products.
Source Fool.com
