Shares of Ryan Specialty (NYSE:RYAN) surged 3.9% to $66.64 in early trading today after BMO Capital Markets upgraded the insurance broker to "outperform" from "market perform."
BMO also raised its price target for the stock to $75 from $65, representing a 17% upside from its last close.
The upgrade comes as BMO highlighted Ryan Specialty’s ongoing investments in shifting work processes to lower-cost geographies and acquiring high-margin businesses.
The brokerage noted that these efforts, along with double-digit organic growth, provide a solid foundation for margin expansion in the coming quarters.
BMO pointed to the success of Ryan Specialty's peers, such as Arthur J. Gallagher (NYSE:AJG), which has more than 20% of its workforce in India, as a key driver of margin improvement through geographic cost restructuring.
According to LSEG data, six out of 15 brokerages rate Ryan Specialty as a "buy" or higher, eight rate it as "hold," and one suggests "sell," with a median price target of $68.50.
As of the last close, Ryan Specialty's share price was up 49.7% year-to-date.