Heritage Insurance (HRTG) Surges 11.7%: Is This an Indication of Further Gains?

Heritage Insurance (HRTG) shares rallied 11.7% in the last trading session to close at $28.4. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 10.2% gain over the past four weeks.

This super-regional U.S. property and casualty insurance holding company is well-positioned to benefit from prudent underwriting execution and rate adequacy initiatives implemented over the past three years. Heritage Insurance is sharpening its focus on profitability through rate adequacy, profit-oriented underwriting standards and a cautious approach to new business in saturated or underperforming markets.

For 2025, the insurer’s plan centers on selectively re-entering profitable markets while allocating capital in a disciplined way to safeguard margins. The company is committed to maintaining rate adequacy, using advanced data analytics to manage exposures effectively, and leveraging its operational platform to support sustainable expansion. Heritage expects its in-force policy count to stabilize and gradually grow in 2025 and 2026.

The excess and surplus (E&S) segment remains a key growth engine, with the company pursuing expansion into additional states. Heritage’s reinsurance strategy continues to provide strong protection against hurricanes and severe weather in coastal markets. The company anticipates a meaningful reduction in its ceded premium ratio, driven by cost-efficient enhancements to its reinsurance program and higher gross premiums earned. Notably, Heritage recently completed placement of its 2025–2026 indemnity-based catastrophe excess-of-loss reinsurance program for its insurance subsidiaries.

This property and casualty insurance holding company is expected to post quarterly earnings of $0.53 per share in its upcoming report, which represents a year-over-year change of +96.3%. Revenues are expected to be $210.12 million, down 0.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Heritage Insurance, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on HRTG going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Heritage Insurance is a member of the Zacks Insurance - Property and Casualty industry. One other stock in the same industry, First American Financial (FAF), finished the last trading session 1.4% lower at $66.35. FAF has returned 4.1% over the past month.

For First American Financial, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.44. This represents a change of +7.5% from what the company reported a year ago. First American Financial currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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