JPMorgan downgrades RenaissanceRe stock to Neutral on reinsurance pricing concerns

Published 09/10/2025, 08:46
JPMorgan downgrades RenaissanceRe stock to Neutral on reinsurance pricing concerns

Investing.com - JPMorgan downgraded RenaissanceRe Holdings (NYSE:RNR) from Overweight to Neutral on Thursday, while maintaining a price target of $303.00. The $12.3 billion market cap insurer currently trades at a P/E ratio of 6.7x, significantly below industry averages, with InvestingPro analysis indicating the stock remains undervalued at current levels.

The downgrade comes approximately six months after JPMorgan had upgraded the stock to Overweight in April 2025, citing expectations of robust margins, negative sentiment, and a depressed valuation at that time.

JPMorgan now forecasts more significant price reductions in the property catastrophe market than previously anticipated, projecting declines of 15-20% for January 2026 renewals compared to its earlier expectation of approximately 10%.

The investment bank noted that while investor sentiment toward RenaissanceRe remains negative and its valuation is still depressed, the stock has recovered considerably in recent months.

JPMorgan also indicated it sees better opportunities in other stocks that have experienced pullbacks, specifically mentioning PGR and MMC, though it maintains a generally positive bias on RenaissanceRe.

In other recent news, RenaissanceRe Holdings reported second-quarter earnings that significantly exceeded analyst expectations. The company achieved adjusted earnings of $12.29 per share, surpassing the consensus estimate of $9.78. Revenue also beat forecasts, coming in at $3.21 billion compared to the expected $2.96 billion. The reinsurer posted a 24.2% annualized operating return on average common equity and a combined ratio of 75.1%, indicating strong profitability in its underwriting operations. Additionally, RenaissanceRe declared a quarterly dividend of $0.40 per common share and renewed its share buyback program with an authorization of up to $750 million. The buyback program will continue until the full authorized amount is repurchased unless terminated earlier by the Board of Directors. In other developments, Evercore ISI upgraded RenaissanceRe’s stock rating from Underperform to In Line, setting a price target of $244.00. This upgrade reflects Evercore ISI’s acknowledgment of the company’s book value per share growth surpassing previous expectations.

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