When is the projected doubleâdigit adjusted operating EPS accretion expected to materialize, and what key assumptions underpin that forecast?
Timing of the accretion
Skyward Specialty says the doubleâdigit adjusted operating EPS accretion will be realized in the first full year after the deal closes. The transaction is expected to close in Q3âŻ2025, so the accretion should appear in Skywardâs FYâŻ2026 results (the 2026 fiscal year, which ends 31âŻDecemberâŻ2026 for most U.S. insurers). In practice, earnings guidance for Q4âŻ2025 and the fullâyear 2026 will already incorporate the boost, but the âdoubleâdigitâ figure will be confirmed when the 2026 earnings are released (likely MayâJuneâŻ2027).
Key assumptions behind the forecast
| Assumption | Why it matters for the EPS accretion |
|---|---|
| Completion of the $555âŻm acquisition on schedule | Delays would push the integration horizon and compress the âfirst full yearâ window. |
| $1.5âŻbn of additional managed premium is realized | The premium uplift drives higher net earned premium (NEP) and, with Skywardâs underwriting discipline, translates into incremental underwriting profit. |
| Synergy capture â cost & revenue synergies | Management targets ~5â7âŻ% cost reduction on overlapping functions and crossâselling of existing SKWD products to Apolloâs client base, enhancing operating margin. |
| Retention of Apolloâs lossâratio and combined ratio | The EPS model assumes Apolloâs combined ratio stays in line with its 2024â25 average (~92âŻ%). A deterioration would erode the projected operating profit. |
| Financing terms stay as announced | The $371âŻm cash outflow is funded by a committed debt package at a roughly 5â6âŻ% effective rate; any increase in borrowing cost would reduce net income. |
| No material adverse claim spikes or regulatory changes | The forecast is built on current lossâdevelopment patterns; a large catastrophe or regulatory capital squeeze would depress earnings. |
| Adjustedâoperating EPS excludes oneâoff acquisition expenses | The âadjustedâ metric strips integration costs, transaction fees and acquisitionârelated amortization, so the accretion is a âcleanâ operatingâEPS view. |
Trading implications
The market has already priced in a modest premiumâplusâsynergy narrative (the stock is trading near its 200âday moving average with a bullish engulfing candle on the day of the release). If analysts accept the FYâŻ2026 accretion outlook, we could see the price push above the $22â$23 resistance zone, targeting the $25â$27 range (â30âŻ% upside from current levels). Conversely, any delay in closing, a miss on the $1.5âŻbn premium target, or a rise in the combined ratio would quickly erode the upside and could test the $18â$19 support (the 50âday MA). A prudent entry point would be on a pullâback to the 20âday EMA with volume confirming buying pressure, while a stopâloss just below the 50âday MA protects against integration risk. Keep an eye on quarterly updates from Skyward and Apolloâs lossâratio trendsâthose data points will be the first litmus test of whether the doubleâdigit EPS accretion will materialize as forecast.