7 Most Undervalued Financial Stocks To Buy According To Analysts

3. Mercury General Corporation (NYSE:MCY)

Analyst Upside: 66.01%

Forward P/E: 6.63

Mercury General Corporation (NYSE:MCY) is an insurance holding company focused on writing personal automobile insurance business. The company offers homeowners insurance in almost 10 states, commercial automobile insurance in four states, and mechanical protection insurance in various states.

Mercury General Corporation (NYSE:MCY) shares have been trading down by 27% year-to-date following challenging circumstances of potential losses due to wildfires. However, on January 12, Raymond James reiterated an Outperform rating on MCY shares, with a price target of $80, representing an upside of 66% from the stock’s current price. Raymond’s analyst has expressed confidence in the company’s recovery. The analyst pointed out that insurance is mainly based on replacement costs rather than market value.

Despite the massive economic losses, Mercury General Corporation’s robust top-line growth and underlying profitability will assist in the ongoing catastrophe. However, Raymond has reduced its Q1 2025 EPS estimate to $0, down from the previous outlook of $1.60 per share.