Is Lemonade a Buy After Morgan Stanley's Upgrade?

By Jack Delaney – Mar 22, 2026 at 12:31PM ESTKey PointsIn January, Lemonade debuted an autonomous car insurance product.Last week, Morgan Stanley boosted its price target on Lemonade from $80 to $85, in part due to the promise of that new offering.The upstart insurer is still not profitable. On March 17, Morgan Stanley upgraded Lemonade (LMND 0.42%) from equal weight (hold) to overweight (buy) and boosted its price target on the stock from $80 to $85. By the end of the day, that was enough to send shares of the digital insurance company 15.8% higher from its March 16 closing price. Today, we'll look at the reason for this upgrade and what it means for investors. Image Source: Getty Images. The autonomous insurer Morgan Stanley's upgrade was based on Lemonade's early-mover advantage in autonomous vehicle insurance, so it's important to have some context for that market. Even though they're not mainstream yet, self-driving cars are a fast-growing sector and will become more commonplace in the years ahead.

Grand View Research projects the global autonomous vehicle market will climb in value from $68 billion in 2024 to around $214 billion by 2030. What that also means is that there will be a growing market to insure those vehicles. In January, Lemonade launched autonomous car insurance, calling it a "first-of-its-kind product," starting with Tesla's full self-driving (FSD) system. As the company explained: The new offering cuts per-mile rates for FSD-engaged driving by approximately 50%, reflecting what the data shows to be significantly reduced risk during autonomous operation. Lemonade expects further reductions as Tesla releases FSD software updates, which are anticipated to make the cars even safer over time. Lemonade can access Tesla vehicle data with a customer's permission and then use that data in its risk-prediction models. ExpandNYSE: LMNDLemonadeToday's Change(-0.42%) $-0.27Current Price$64.27Key Data PointsMarket Cap$4.9BDay's Range$63.39 - $65.9052wk Range$24.31 - $99.90Volume87KAvg Vol2.6M The investing takeaway One analyst upgrade alone doesn't make a stock worth investing in. Still, for Lemonade in particular, this one was a powerful recognition from one of the world's largest investment banks that it sees the value in its business strategy. This particular tactic of taking in granular data about when Teslas are in self-driving mode to offer discounted rates to their owners dovetails well with Lemonade's digital-first, lower-cost brand identity, and should give it an early edge in the self-driving car insurance market. That's the potential, but it's important to keep in mind that this is new territory, and that any business innovator will encounter bumps along its journey. Lemonade is not profitable, and as I write this, the stock price is around $5 below its 2020 debut closing price of $69.41. It is, however, up considerably from where it traded during 2022 and 2023, when it generally lived below $25 per share. That reflects the simple truth that this is a young business. Its shares are likely to remain volatile. There's still significant upside potential here, especially given Lemonade's new ability to use Tesla vehicle data to deliver more efficiently priced policies for their owners. However, it's also a speculative investment, and every potential shareholder should treat it as such.Read NextMar 20, 2026 •By Eric VolkmanWhy Lemonade Stock Soared by 16% This WeekMar 17, 2026 •By James BrumleyWhy Lemonade Stock Is Up More Than 15% on TuesdayMar 8, 2026 •By Brett SchaferWhy Shares of Lemonade Stock Tanked 40.3% Last MonthMar 7, 2026 •By Leo SunShould You Buy Lemonade (LMND) While It's Below $65?Mar 5, 2026 •By Jack DelaneyLemonade Stock Dropped by 36% in February. Here's What Happened.Mar 4, 2026 •By Matt Frankel, CFPLemonade: Reasons to Buy and Reasons to SellAbout the AuthorJack is a seasoned content strategist with over a decade of experience in financial publishing. He's directed technology, emerging opportunities, and alternative asset publications to deliver actionable insights to investors. He has a B.A. in Communication Studies.TMFJackDelaneyStocks MentionedLemonadeNYSE: LMND$64.18(-0.56%)-$0.36*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.