JMP Securities analyst Matthew Carletti has upgraded United Insurance Holdings Corp. to "market perform" from "market underperform," citing the company's "fair" valuation compared to its peers.

The upgrade comes a day after United Insurance reported year-over-year declines in second-quarter net income and total comprehensive income.

Carletti wrote in a Aug. 9 report that he still has some of the same concerns about the company's performance that he held when the company was downgraded in November 2016. But since the downgrade, United Insurance's share price has increased 6% compared to the S&P 500's gain of 18% and the SNL Insurance Underwriter Index's gain of 29%. The modest increase puts the company's shares at a discount compared to its peers with similar expectations for return on equity in 2018, he said.

The company has also closed its merger with American Coastal Insurance Co. and has seen loss reserves stabilize in 2017, subduing some of Carletti's remaining concerns on those matters.

Carletti expects the company to see full-year operating income of $46.5 million in 2017 and $79.8 million in 2018. Full-year EPS is expected to be $1.20 for 2017 and $1.90 for 2018.