JPMorgan Maintains Neutral Rating on Enact (ACT)JPMorgan Maintains Neutral Rating on Enact (ACT) with Slight Target Adjustment Post-Q3 Earnings
On November 7, JPMorgan analyst Richard Shane reaffirmed a Neutral rating on Enact Holdings, Inc. (NASDAQ: ACT) while modestly reducing his price target to $39 from $40. This adjustment followed the company’s third-quarter 2025 financial update, as reported by The Fly.
Third-Quarter 2025 Financial Overview
Enact reported total revenue of $311.4 million, a slight increase from the $309.5 million recorded in the same quarter last year. Premiums for the quarter came in at $244.6 million, compared to $249 million in Q3 2024. The company’s liquidity position remained stable, with $339 million in cash and cash equivalents and an additional $311 million in invested assets as of September 30. Management noted that the combined liquidity pool was essentially unchanged from the previous quarter, as share repurchases and regular dividend payments largely offset the capital contributions from its EMICO subsidiary.
Key Operational Metrics Show Steady Growth
New insurance written during the quarter reached $14 billion, representing a 6% increase from Q2 2025 and a 3% year-over-year rise. The product mix remained heavily weighted toward monthly premium policies, which accounted for 97% of the volume, while purchase originations made up 93%. Primary insurance in force grew marginally to $272 billion, up from $270 billion in the prior quarter and $268 billion a year earlier. During the quarter, Enact continued its commitment to shareholder returns, distributing $31 million in dividends.
Industry Context: Property & Casualty Insurance in Q3
Enact operates within the broader Property & Casualty (P&C) insurance sector, which is known for its cyclicality. The industry tends to perform well during "hard markets," characterized by rising premium rates that outpace claims and cost inflation. Conversely, profitability can compress during "soft markets." External factors such as interest rates—which influence investment yields—and long-term challenges like increasing catastrophe losses due to climate change and rising litigation costs ("social inflation") also shape sector performance.
Among the 33 P&C insurance stocks tracked, the group reported a strong collective quarter, with revenues exceeding consensus estimates by 3.8% on average. Following their earnings releases, these stocks have remained resilient, posting an average gain of 4.6%.
Enact’s Position and Market Performance
As a leading U.S. private mortgage insurer, Enact plays a vital role in the housing ecosystem by enabling lenders to offer mortgages with lower down payments—thereby expanding access to homeownership—while assuming default risk on behalf of lenders. The company’s Q3 revenue of $311.5 million was essentially flat compared to the prior year and aligned with analyst expectations. Although it was a relatively slower quarter with only a narrow beat on earnings per share estimates, the stock has responded positively, rising 8.3% since the earnings release to trade around $38.90.
Technical Perspective and Price Levels
From a technical standpoint, Enact’s share price is currently situated below the revised JPMorgan target of $39. Key support zones to monitor are located near $35, $34, and $31, which could serve as potential areas of buyer interest should any near-term pullbacks occur. On the upside, a take-profit target around $42 remains a relevant resistance level for traders and investors looking for continued upward momentum.
In summary, while JPMorgan’s slight target trim reflects a cautious near-term outlook, Enact’s stable operational performance, disciplined capital management, and strategic role in the mortgage market continue to support a steady investment case within the Neutral rating framework.
Long
