Buckingham Research Group analyst Amit Kumar upgraded his rating on Employers Holdings Inc. to "neutral" from "underperform" and raised his price target to $42 from $40.

The analyst wrote that the upgrade was due to his view of the risk/reward in the stock as more balanced with upside and downside potential of $51 and $39, respectively.

According to Kumar, the valuation gap between Employers Holdings and its peers widened as a reflection of "improved optimism" in the broader property and casualty environment, not including workers' compensation. This gap might be justifiable until pricing becomes positive, Kumar wrote. The analyst also noted that the company's workers' compensation line has struggled to improve pricing.

Kumar increased his EPS estimate to $3.00 from $2.35 for 2019 and to $2.70 from $2.20 for 2020.