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Why Is RenaissanceRe (RNR) Up 2.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for RenaissanceRe (RNR - Free Report) . Shares have added about 2.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RenaissanceRe due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
RenaissanceRe second-quarter 2018 operating earnings per share of $5.23 beat the Zacks Consensus Estimate of $2.71 by 73.4%. However, the bottom line skyrocketed 87.5% year over year.
The quarter witnessed a strong performance across the business. Cost control and higher investment income added to the upside.
Quarterly Operational Update
RenaissanceRe’s second-quarter operating revenues of $502 million surpassed the Zacks Consensus Estimate of $467 million by 7.4% and improved 14.4% year over year.
Gross premiums written increased 18.1% year over year to $977.3 million, driven by higher premiums from the Property as well as Casualty and Specialty segments.
Net investment income is $71.4 million for the reported quarter, improved by 31.7% year over year.
RenaissanceRe’s total expenses were $329.2 million, down 22.4% year over year.
Underwriting income of $226.6 million more than doubled from the year-ago period. Combined ratio of 47.2% improved 2410 basis points (bps) from the prior-year quarter.
Quarterly Segment Update
Property Segment
Gross premiums written were $552.6 million, up 10.7% year over year. This improvement is attributable to higher written premiums in the catastrophe class of business as well as increase in premiums in other property class of business.
Underwriting income of $213.7 million doubled year over year. Combined ratio of (4.7%) compared favorably with 94.2% in the year-ago quarter.
Casualty and Specialty Segment
Gross premiums written were $424.7 million, up 29.5% year over year, driven by selective growth in general casualty, financial lines and other specialty classes of business.
Underwriting income of $13 million increased more than fourfold year over year. Combined ratio of 98.8% improved 430 bps from the year-earlier quarter. This upside was largely driven by 620 bps decrease in underwriting expenses ratio.
Financial Position
As of Jun 30, 2018, total assets of RenaissanceRe were $17 billion, up 11.8% from 2017-end level.
The company had total debt of $990.4 million as of Jun 30, 2018, up 0.1% from 2017-end level.
Cash and cash equivalents were $0.5 billion, down 59.7% from $1.4 billion as of Dec 31, 2017.
Book value per share of $104.56 improved 4.5% year over year.
Operating Return on equity expanded 100 basis points year over year to 20.3% in the quarter under review.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. In the past month, the consensus estimate has shifted 8.92% due to these changes.
VGM Scores
At this time, RenaissanceRe has a strong Growth Score of A, though it is lagging a bit on the momentum front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and growth investors while momentum investors may want to look elsewhere.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise RenaissanceRe has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is RenaissanceRe (RNR) Up 2.8% Since Last Earnings Report?
It has been about a month since the last earnings report for RenaissanceRe (RNR - Free Report) . Shares have added about 2.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is RenaissanceRe due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
RenaissanceRe's Q2 Earnings & Revenues Beat, Rise Y/Y
RenaissanceRe second-quarter 2018 operating earnings per share of $5.23 beat the Zacks Consensus Estimate of $2.71 by 73.4%. However, the bottom line skyrocketed 87.5% year over year.
The quarter witnessed a strong performance across the business. Cost control and higher investment income added to the upside.
Quarterly Operational Update
RenaissanceRe’s second-quarter operating revenues of $502 million surpassed the Zacks Consensus Estimate of $467 million by 7.4% and improved 14.4% year over year.
Gross premiums written increased 18.1% year over year to $977.3 million, driven by higher premiums from the Property as well as Casualty and Specialty segments.
Net investment income is $71.4 million for the reported quarter, improved by 31.7% year over year.
RenaissanceRe’s total expenses were $329.2 million, down 22.4% year over year.
Underwriting income of $226.6 million more than doubled from the year-ago period. Combined ratio of 47.2% improved 2410 basis points (bps) from the prior-year quarter.
Quarterly Segment Update
Property Segment
Gross premiums written were $552.6 million, up 10.7% year over year. This improvement is attributable to higher written premiums in the catastrophe class of business as well as increase in premiums in other property class of business.
Underwriting income of $213.7 million doubled year over year. Combined ratio of (4.7%) compared favorably with 94.2% in the year-ago quarter.
Casualty and Specialty Segment
Gross premiums written were $424.7 million, up 29.5% year over year, driven by selective growth in general casualty, financial lines and other specialty classes of business.
Underwriting income of $13 million increased more than fourfold year over year. Combined ratio of 98.8% improved 430 bps from the year-earlier quarter. This upside was largely driven by 620 bps decrease in underwriting expenses ratio.
Financial Position
As of Jun 30, 2018, total assets of RenaissanceRe were $17 billion, up 11.8% from 2017-end level.
The company had total debt of $990.4 million as of Jun 30, 2018, up 0.1% from 2017-end level.
Cash and cash equivalents were $0.5 billion, down 59.7% from $1.4 billion as of Dec 31, 2017.
Book value per share of $104.56 improved 4.5% year over year.
Operating Return on equity expanded 100 basis points year over year to 20.3% in the quarter under review.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. In the past month, the consensus estimate has shifted 8.92% due to these changes.
VGM Scores
At this time, RenaissanceRe has a strong Growth Score of A, though it is lagging a bit on the momentum front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value and growth investors while momentum investors may want to look elsewhere.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise RenaissanceRe has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.