Jefferies downgraded RLI Corp. to Underperform from Hold on Tuesday, citing valuation concerns after the insurer’s shares approached a 52-week high.
The brokerage set a $53 price target, implying roughly 20% downside from RLI’s latest close of $66.62. Jefferies estimated the stock’s price-to-book ratio at 2.6 times, below RLI’s historical average near 4 times and above the 1.9 times multiple typical for property and casualty peers.
RLI’s shares were trading at $66.62, near the $68.69 peak reached earlier in the year. The company’s price-to-book ratio stood at 3.49 times according to InvestingPro, while its P/E ratio was 13.96 and operating return on equity neared 13%.
Jefferies also trimmed its long-term earnings per share estimates, projecting $2.70 for 2026, $2.55 for 2027 and $2.60 for 2028. These figures sit about 7% below the Street consensus for each year. Jefferies noted RLI’s property accident year loss ratio is expected to exceed consensus by 2.5 points in 2026 and 2 points in 2027, while casualty loss ratios are seen 0.4 to 1.3 points above consensus through 2028.
In contrast, Keefe, Bruyette & Woods raised its price target to $74 from $70 while maintaining an Outperform rating. KBW lifted its 2026 EPS estimate to $2.90 from $2.80 but cut its 2027 forecast to $2.85 from $2.95.
RLI reported second-quarter 2026 operating earnings of $0.83 per share, beating the $0.71 estimate, and revenue of $575.6 million, exceeding expectations. The company returned over $200 million to shareholders via dividends and buybacks during the period.
InvestingPro data showed 4 analysts have reduced earnings estimates for the upcoming period.
