BMO Capital Starts Patriot National (PN) at Outperform

BMO Capital initiates coverage on Patriot National (NYSE: PN) with a Outperform rating and a price target of $16.00.

Analyst Charles Sebaski commented, "Patriot National is a full-service workers’ compensation outsourcing business, which offers insurers a means to efficiently and cost effectively write a book of workers’ compensation business. This is a high EBITDA margin service business at over 25%. It was constructed on a modern technology platform that is scalable, which will help to achieve the +30% margin in 2016. A high-growth company, Patriot will do approximately $98 million of fee income in 2014, and this should increase by 78% to almost $175 million in 2015. We believe the company can achieve this growth by both fulfilling its already in place contracts with clients and engaging in tactical M&A. Overall, we see Patriot as well positioned to take advantage of the changing insurance sector, whereby capital looks to access insurance risk in ever more efficient ways. Many small specialty insurers are also looking to diversify their exposure away from the deteriorating property market, and in our view; Patriot provides an impressively easy and efficient means to do just that. However, we think it may take several quarters before investors come to see Patriot’s value proposition, and hence much of the stock appreciation may likely be back half of the year weighted."

For an analyst ratings summary and ratings history on Patriot National click here. For more ratings news on Patriot National click here.

Shares of Patriot National closed at $13.55 yesterday.

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