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Why RenaissanceRe (RNR) Shares Are Attracting Investors Now
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RenaissanceRe Holdings Ltd. (RNR - Free Report) is strategically positioned for growth, leveraging rising premiums earned, a solid financial position, acquisitions and partnerships. The rise in returns from the fixed maturity portfolio and improving underwriting results add further momentum. The favorable impact of a high interest rate environment remains a key driver.
Price Performance & Zacks Rank
Over the past three months, shares of RenaissanceRe have gained 21.6%, outperforming the industry’s 3.3% rise. Headquartered in Pembroke, Bermuda, RNR offers insurance and reinsurance products in the domestic as well as international markets. It was founded in 1993 and currently has a market cap of $11.2 billion.
Due to its solid prospects, this Zacks Rank #2 (Buy) stock is a compelling addition to investment portfolios at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for RenaissanceRe’s current-year earnings is pegged at $33.90 per share, which has witnessed four upward estimate revisions in the past 30 days against none in the opposite direction. The estimate indicates massive year-over-year growth from the 2022 level of $7.30 per share. RNR beat on earnings in all the last four quarters, the average surprise being 16.5%.
RenaissanceRe Holdings Ltd. Price and EPS Surprise
The consensus estimate for RenaissanceRe’s current-year revenues stands at $7.9 billion, indicating 14.9% year-over-year growth. We expect its Casualty and Specialty business to play a significant role in top-line growth. Our model suggests that net premiums earned from the segment will jump nearly 16% year over year in 2023.
Furthermore, increasing returns from its fixed maturity and short-term portfolios are expected to benefit its net investment income. We expect the metric to surge almost 112% year over year in 2023, backed by the high interest rate environment.
RenaissanceRe’s robust trailing 12-month return on equity of 26.7% outpaced the industry's average of 7.2%. This highlights the company's ability to produce significant returns compared to industry benchmarks, showcasing its efficiency in capital investment.
Its ability to generate growing free cash flow is commendable, which will improve its financial flexibility. Over the trailing 12-month period, the metric jumped 33% year over year. It exited the third quarter with cash and cash equivalents of $1.2 billion.
The company's strategic acquisition initiatives continue to play a pivotal role in fostering business expansion. The recent acquisition of Validus Re from AIG stands out as its most substantial move in recent years. This strategic maneuver is expected to not only augment the scale of its global property and casualty reinsurance business but also contribute significantly to overall profitability.
A Risk
However, there is a factor that investors should keep a careful eye on.
RNR’s rising operational expenses keep denting its margins. The metric surged 30.4% year over year in 2022. We expect it to further increase 15.5% this year. Nevertheless, we believe that a systematic and strategic plan of action will drive growth and improve financials in the long term.
The Zacks Consensus Estimate for Assurant’s current-year earnings indicates a 30.8% year-over-year increase. It beat earnings estimates in all the past four quarters, with an average surprise of 42.4%. Also, the consensus mark for AIZ’s 2023 revenues suggests 5.4% year-over-year growth.
The Zacks Consensus Estimate for Brown & Brown’s current-year earnings is pegged at $2.76 per share, which indicates 21.1% year-over-year growth. It has witnessed one upward estimate revision against none in the opposite direction during the past month. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 12.3%.
The consensus mark for Employers Holdings’ current-year earnings indicates a 17.8% year-over-year increase. It beat earnings estimates in all the past four quarters, with an average surprise of 26.5%. Furthermore, the consensus estimate for EIG’s 2023 revenues suggests 17.5% year-over-year growth.
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Why RenaissanceRe (RNR) Shares Are Attracting Investors Now
RenaissanceRe Holdings Ltd. (RNR - Free Report) is strategically positioned for growth, leveraging rising premiums earned, a solid financial position, acquisitions and partnerships. The rise in returns from the fixed maturity portfolio and improving underwriting results add further momentum. The favorable impact of a high interest rate environment remains a key driver.
Price Performance & Zacks Rank
Over the past three months, shares of RenaissanceRe have gained 21.6%, outperforming the industry’s 3.3% rise. Headquartered in Pembroke, Bermuda, RNR offers insurance and reinsurance products in the domestic as well as international markets. It was founded in 1993 and currently has a market cap of $11.2 billion.
Due to its solid prospects, this Zacks Rank #2 (Buy) stock is a compelling addition to investment portfolios at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for RenaissanceRe’s current-year earnings is pegged at $33.90 per share, which has witnessed four upward estimate revisions in the past 30 days against none in the opposite direction. The estimate indicates massive year-over-year growth from the 2022 level of $7.30 per share. RNR beat on earnings in all the last four quarters, the average surprise being 16.5%.
RenaissanceRe Holdings Ltd. Price and EPS Surprise
RenaissanceRe Holdings Ltd. price-eps-surprise | RenaissanceRe Holdings Ltd. Quote
The consensus estimate for RenaissanceRe’s current-year revenues stands at $7.9 billion, indicating 14.9% year-over-year growth. We expect its Casualty and Specialty business to play a significant role in top-line growth. Our model suggests that net premiums earned from the segment will jump nearly 16% year over year in 2023.
Furthermore, increasing returns from its fixed maturity and short-term portfolios are expected to benefit its net investment income. We expect the metric to surge almost 112% year over year in 2023, backed by the high interest rate environment.
RenaissanceRe’s robust trailing 12-month return on equity of 26.7% outpaced the industry's average of 7.2%. This highlights the company's ability to produce significant returns compared to industry benchmarks, showcasing its efficiency in capital investment.
Its ability to generate growing free cash flow is commendable, which will improve its financial flexibility. Over the trailing 12-month period, the metric jumped 33% year over year. It exited the third quarter with cash and cash equivalents of $1.2 billion.
The company's strategic acquisition initiatives continue to play a pivotal role in fostering business expansion. The recent acquisition of Validus Re from AIG stands out as its most substantial move in recent years. This strategic maneuver is expected to not only augment the scale of its global property and casualty reinsurance business but also contribute significantly to overall profitability.
A Risk
However, there is a factor that investors should keep a careful eye on.
RNR’s rising operational expenses keep denting its margins. The metric surged 30.4% year over year in 2022. We expect it to further increase 15.5% this year. Nevertheless, we believe that a systematic and strategic plan of action will drive growth and improve financials in the long term.
Other Key Picks
Some other top-ranked stocks in the broader Finance space are Assurant, Inc. (AIZ - Free Report) , Brown & Brown, Inc. (BRO - Free Report) and Employers Holdings, Inc. (EIG - Free Report) . While Assurant sports a Zacks Rank #1 (Strong Buy) now, Brown & Brown and Employers Holdings carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Assurant’s current-year earnings indicates a 30.8% year-over-year increase. It beat earnings estimates in all the past four quarters, with an average surprise of 42.4%. Also, the consensus mark for AIZ’s 2023 revenues suggests 5.4% year-over-year growth.
The Zacks Consensus Estimate for Brown & Brown’s current-year earnings is pegged at $2.76 per share, which indicates 21.1% year-over-year growth. It has witnessed one upward estimate revision against none in the opposite direction during the past month. BRO beat earnings estimates in each of the past four quarters, with an average surprise of 12.3%.
The consensus mark for Employers Holdings’ current-year earnings indicates a 17.8% year-over-year increase. It beat earnings estimates in all the past four quarters, with an average surprise of 26.5%. Furthermore, the consensus estimate for EIG’s 2023 revenues suggests 17.5% year-over-year growth.