UPDATE: Gilford Securities Upgrades HCI Group Following Homeowners Choice Subsidiary Announcement

In a report published Friday, Gilford Securities analyst Casey Alexander upgraded the rating on HCI Group (NYSE: HCI) from Neutral to Buy, and raised the price target from $37.50 to $44.50.

In the report, Gilford Securities noted, “Yesterday after the close HCI Group (Symbol: HCI) announced that the Homeowners Choice Property & Casualty Insurance subsidiary has been approved by the Florida Office of Insurance Regulation for a 50,373 policies from Citizens Property Insurance. Policy take-outs from Citizens have been central to the HCI growth plan. We would note that it is likely that the final number will be somewhat smaller than the 50k announced today as duplicate claims for policies among insurance firms competing for the same policy get randomly assigned. Last year HCI was approved for over 70k policies and at the end of the process ended up with 59k policies. We are not even positive that HCI will actually execute the take-out. But assuming they do, we can be assured that the take-out will be accretive to EPS, likely starting in 2013 Q4.”

HCI Group closed on Thursday at $30.97.