Morgan Stanley Analyst Says Tesla/Lemonade Partnership Will Drive Auto Insurance Innovation

Written by Emily J. Thompson, Senior Investment Analyst

Updated: 9h ago

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Morgan Stanley analyst Bob Huang says the Tesla (TSLA)/Lemonade (LMND) partnership underscores more opportunities in auto insurance, as higher repair costs, unclear liability, and disrupted risk segmentation should support premiums and product innovation over time. In the firm's view, Lemonade's AV insurance product validates autonomous driving progress. Morgan Stanley Tesla/Lemonade deal will chart a path for auto insurance future, not destroy it.

LMND

$89.88+Infinity%1D

Analyst Views on LMND

Wall Street analysts forecast LMND stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for LMND is 77.60 USD with a low forecast of 40.00 USD and a high forecast of 98.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

6 Analyst Rating

2 Buy

3 Hold

1 Sell

Hold

Current: 93.250

Low

40.00

Averages

77.60

High

98.00

Current: 93.250

Low

40.00

Averages

77.60

High

98.00

Citizens

Outperform

maintain

$80 -> $85

2026-01-16

Reason

Citizens

Price Target

$80 -> $85

AI Analysis

2026-01-16

maintain

Outperform

Reason

Citizens raised the firm's price target on Lemonade to $85 from $80 and keeps an Outperform rating on the shares. Fourth quarter results are expected to reflect lighter catastrophe losses and limited mark-to-market impacts, with attention focused on pricing trends amid weakness in property lines, the analyst tells investors in a research note. While property pricing is declining, returns remain strong and casualty lines continue to see solid rate increases, pointing to a market in transition rather than broadly soft, the firm says.

Truist

Arvind Ramnani

Buy

initiated

$98

2026-01-06

Reason

Truist

Arvind Ramnani

Price Target

$98

2026-01-06

initiated

Buy

Reason

Truist analyst Arvind Ramnani initiated coverage of Lemonade with a Buy rating and $98 price target. Lemonade's digital-first approach to the insurance industry provides the company with significant structural advantages such as a lower overall cost base relative to traditional insurers, the analyst tells investors in a research note. Lemonade leverages AI, data, and digital tools across entire business, including customer service, claims, processing, and underwriting decisions, which helps to reduce costs and biases, Truist says.

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Morgan Stanley

Underweight -> Equal Weight

upgrade

$53 -> $85

2025-12-16

Reason

Morgan Stanley

Price Target

$53 -> $85

2025-12-16

upgrade

Underweight -> Equal Weight

Reason

Morgan Stanley upgraded Lemonade to Equal Weight from Underweight with a price target of $85, up from $53. As the company continues to consistently deliver on outsized growth from autos, while seeing overall loss ratio improvements, Lemonade "presents a unique story" with total loss ratio stability and a clear path to EBITDA profitability by Q4 of 2026, the analyst tells investors.

Keefe Bruyette

Underperform

maintain

$35 -> $40

2025-11-25

Reason

Keefe Bruyette

Price Target

$35 -> $40

2025-11-25

maintain

Underperform

Reason

Keefe Bruyette raised the firm's price target on Lemonade to $40 from $35 and keeps an Underperform rating on the shares. The firm sees modest downside to consensus estimates in 2026, the analyst tells investors in a research note.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.