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RenaissanceRe Holdings Ltd. (RNR) Hit a 52 Week High, Can the Run Continue?
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Shares of RenaissanceRe (RNR - Free Report) have been strong performers lately, with the stock up 12.1% over the past month. The stock hit a new 52-week high of $227.16 in the previous session. RenaissanceRe has gained 23.2% since the start of the year compared to the 1.8% move for the Zacks Finance sector and the 9% return for the Zacks Insurance - Property and Casualty industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 1, 2023, RenaissanceRe reported EPS of $8.33 versus consensus estimate of $6.54 while it beat the consensus revenue estimate by 1.67%.
For the current fiscal year, RenaissanceRe is expected to post earnings of $31.60 per share on $7.92 billion in revenues. This represents a 332.88% change in EPS on a 14.6% change in revenues. For the next fiscal year, the company is expected to earn $28.49 per share on $9.16 billion in revenues. This represents a year-over-year change of -9.85% and 15.67%, respectively.
Valuation Metrics
RenaissanceRe may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
RenaissanceRe has a Value Score of A. The stock's Growth and Momentum Scores are D and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 7.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 15.3X. On a trailing cash flow basis, the stock currently trades at 30.6X versus its peer group's average of 15.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, RenaissanceRe currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if RenaissanceRe passes the test. Thus, it seems as though RenaissanceRe shares could have potential in the weeks and months to come.
How Does RNR Stack Up to the Competition?
Shares of RNR have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is CNA Financial Corporation (CNA - Free Report) . CNA has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of D, and a Momentum Score of B.
Earnings were strong last quarter. CNA Financial Corporation beat our consensus estimate by 15.22%, and for the current fiscal year, CNA is expected to post earnings of $4.70 per share on revenue of $11.53 billion.
Shares of CNA Financial Corporation have gained 5.5% over the past month, and currently trade at a forward P/E of 9.28X and a P/CF of 11.38X.
The Insurance - Property and Casualty industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for RNR and CNA, even beyond their own solid fundamental situation.
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RenaissanceRe Holdings Ltd. (RNR) Hit a 52 Week High, Can the Run Continue?
Shares of RenaissanceRe (RNR - Free Report) have been strong performers lately, with the stock up 12.1% over the past month. The stock hit a new 52-week high of $227.16 in the previous session. RenaissanceRe has gained 23.2% since the start of the year compared to the 1.8% move for the Zacks Finance sector and the 9% return for the Zacks Insurance - Property and Casualty industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on November 1, 2023, RenaissanceRe reported EPS of $8.33 versus consensus estimate of $6.54 while it beat the consensus revenue estimate by 1.67%.
For the current fiscal year, RenaissanceRe is expected to post earnings of $31.60 per share on $7.92 billion in revenues. This represents a 332.88% change in EPS on a 14.6% change in revenues. For the next fiscal year, the company is expected to earn $28.49 per share on $9.16 billion in revenues. This represents a year-over-year change of -9.85% and 15.67%, respectively.
Valuation Metrics
RenaissanceRe may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
RenaissanceRe has a Value Score of A. The stock's Growth and Momentum Scores are D and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 7.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 15.3X. On a trailing cash flow basis, the stock currently trades at 30.6X versus its peer group's average of 15.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, RenaissanceRe currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if RenaissanceRe passes the test. Thus, it seems as though RenaissanceRe shares could have potential in the weeks and months to come.
How Does RNR Stack Up to the Competition?
Shares of RNR have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is CNA Financial Corporation (CNA - Free Report) . CNA has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of D, and a Momentum Score of B.
Earnings were strong last quarter. CNA Financial Corporation beat our consensus estimate by 15.22%, and for the current fiscal year, CNA is expected to post earnings of $4.70 per share on revenue of $11.53 billion.
Shares of CNA Financial Corporation have gained 5.5% over the past month, and currently trade at a forward P/E of 9.28X and a P/CF of 11.38X.
The Insurance - Property and Casualty industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for RNR and CNA, even beyond their own solid fundamental situation.