Morgan Stanley turns bearish on Lemonade citing more competitive auto insurance market

Morgan Stanley downgrades Lemonade LMND.N to 'underweight' from 'equal-weight' pointing to more difficult macro environment

Brokerage slashes PT by $11 to $24

Co could see higher loss costs, portion of a premium allocated to cover actual losses, due to tariffs as it seeks to expand into a more competitive and uncertain auto insurance market, Morgan Stanley says in note to clients

While LMND has made progress toward profitability, co is still "several years away" from reporting positive GAAP net income, Morgan Stanley says, adding it believes the stock will be a relative underperformer to other P&C peers

At its investor day in Nov, LMND charted a plan to grow its business tenfold to $10 bln in premiums over the next few years, with auto insurance as a key driver

Of 10 brokerages covering LMND, recommendation breakdown is 1 "buy", 5 "hold", 3 "sell" and 1 "strong sell" and their median PT is $25, LSEG data shows

LMND shares up 1.5% at $28.52 before the bell, looking to snap 3-session losing streak. This as equity futures rise after President Trump's tariffs sparked a brutal selloff .N

Through Mon close, stock down 23% YTD and has nearly halved from its 1-yr high of $53.85 hit on Nov 25