Why Lemonade Stock Wilted by Almost 9% on Wednesday
Yahoo Finance ·
Lemonade ( LMND 8.46% ) stock was nearly as sour as its favorite fruit on Wednesday, at least as far as its stock was concerned. Shares of the insurer dived by nearly 9% during that trading session after an analyst at an influential investment bank downgraded his recommendation on the stock. Well before market open that day, Morgan Stanley 's Bob Huang moved his Lemonade rating down one peg to equalweight (read: hold) from his preceding overweight (buy). He also set a price target of $75 per share. According to reports, while Huang feels that the company's momentum continues to be strong, the company requires a new catalyst to justify its current price levels. These have risen by around 50% over the past few weeks, the analyst pointed out. For him, the development to watch will be how the next-generation i nsurer manages what he considers to be a "softening" auto insurance market. That's a challenge in and of itself, and will be something of a test to see how well it can cope.
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