JMP maintains RenaissanceRe stock Market Perform rating

On Thursday, JMP analysts maintained their Market Perform rating on RenaissanceRe Holdings (NYSE:RNR), a prominent player in the insurance industry with an impressive market cap of $11.8 billion, after the company reported first-quarter results for 2025 that fell short of expectations. According to InvestingPro analysis, the stock appears undervalued despite trading at a modest P/E ratio of 6.8x. RenaissanceRe disclosed an operating income loss of $1.49 per share, which was not only below JMP’s forecast of a $0.34 loss per share but also missed the consensus estimate of a $1.27 loss per share.

The analysts highlighted several areas where RenaissanceRe’s figures diverged from their projections. A significantly higher accident year loss ratio was reported at 108%, compared to the expected 82%. This increase was mainly attributed to the property segment, which was impacted by the Los Angeles wildfires, along with other sizable losses. Despite these challenges, InvestingPro data shows the company maintains strong financial health with a current ratio of 2.95x and liquid assets exceeding short-term obligations. Additionally, the company experienced a net foreign exchange loss of $7 million, contrary to the anticipated break-even result. Interest expenses also exceeded expectations, reaching $27 million versus the estimated $23 million.

However, there were some positive aspects in the report. Prior-period reserve development was more favorable than anticipated, with a gain of $196 million compared to the expected $22 million. This improvement largely came from non-catastrophic property losses and major catastrophe events from 2021 to 2023. Net investment income (NII) also surpassed estimates, coming in at $429 million against an expectation of $420 million.

Gross written premiums (GWP) increased by 4%, which did not meet JMP’s estimate of a 12% rise. The Casualty and Specialty lines underperformed expectations with a 4% decrease as opposed to the projected 15% growth. On the other hand, the Property line exceeded forecasts with a 13% increase against an expected 9%, with Catastrophe coverage growing by 24% due to reinstatement premiums, although Other Property declined by 15% due to adjustments from the previous year.

The book value per share at the end of the quarter was approximately $196, slightly below JMP’s estimate of $199 and unchanged from December 31. RenaissanceRe also reported share repurchases totaling $361 million for the quarter, which was higher than the $300 million JMP had estimated. Furthermore, the company announced that year-to-date through April 21, it has bought back an additional $65 million in shares, bringing the total repurchases to $426 million. InvestingPro data highlights the company’s commitment to shareholder returns, maintaining dividend payments for 31 consecutive years with a current yield of 0.67%. For deeper insights into RenaissanceRe’s financial health and future prospects, including additional ProTips and comprehensive analysis, investors can access the detailed Pro Research Report available on InvestingPro.

In other recent news, RenaissanceRe Holdings has been in the spotlight with several notable developments. The company announced an increase in its quarterly dividend to $0.40 per share and renewed its $750 million share repurchase program. JPMorgan upgraded RenaissanceRe’s stock from Neutral to Overweight, setting a price target of $284, citing resilient reinsurance pricing and strong return on equity prospects. Meanwhile, BMO Capital Markets maintained its Outperform rating with a $292 price target, highlighting a 5% increase in their 2026 earnings estimate due to robust property reserve release trends and significant share repurchases.

Keefe, Bruyette & Woods also weighed in, adjusting their price target for RenaissanceRe to $294 from $318 while maintaining an Outperform rating. This adjustment was attributed to decreased earnings per share estimates for 2025 and 2026, factoring in higher expected catastrophe losses and increased core loss ratios. Despite these adjustments, the firm expressed confidence in favorable reinsurance market conditions expected to yield strong underwriting results. Additionally, Keefe, Bruyette & Woods identified Progressive Corporation (NYSE:PGR) and American International Group (NYSE:AIG) as potential buy opportunities in the P&C insurance sector following a market sell-off. These recent developments underscore the dynamic landscape in which RenaissanceRe and its peers operate.

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