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On Friday, RenaissanceRe Holdings (NYSE:RNR) received an upgraded stock rating from Morgan Stanley (NYSE:MS), moving from Equalweight to Overweight. The firm also increased the price target for the company’s shares to $275.00, up from the previous target of $235.00. According to InvestingPro data, analyst targets for RNR currently range from $231 to $407, with the company showing a GREAT financial health score.
Stifel analysts cited the company’s attractive valuation as the primary reason for the upgrade. They noted that RenaissanceRe’s shares have declined approximately 8% year-to-date and have underperformed in comparison to the broader property and casualty (P&C) insurance sector. The analysts pointed out that historically, RenaissanceRe’s stock has traded around 1.2 times its book value and approximately 11.0 times its forward price-to-earnings ratio, while typically delivering an average return on equity (ROE) of around 12%.
The near-term ROE for RenaissanceRe has been impacted by a series of challenges, including the financial fallout from California wildfires, various aviation-related accidents, a soft pricing environment, and headwinds concerning the Casualty & Specialty business. Despite these pressures, Morgan Stanley’s outlook is optimistic about the company’s potential for recovery moving into 2026.
The firm’s analysts believe that several positive factors position RenaissanceRe to offer a very favorable risk/reward skew. This optimistic view on the company’s prospects and the perceived undervaluation of its stock have led to the decision to upgrade the rating to Overweight. The new price target of $275.00 represents a significant increase from the previous target, reflecting Morgan Stanley’s confidence in the company’s future performance.
In other recent news, RenaissanceRe Holdings reported first-quarter results for 2025 that did not meet expectations, with an operating income loss of $1.49 per share, missing both JMP’s forecast and the consensus estimate. The company faced challenges, including a higher accident year loss ratio and unexpected net foreign exchange losses. However, there were positive aspects, such as favorable prior-period reserve development and net investment income surpassing estimates. RenaissanceRe’s gross written premiums increased by 4%, though this fell short of JMP’s anticipated 12% rise. In a separate development, JPMorgan upgraded RenaissanceRe’s stock from Neutral to Overweight, citing resilient reinsurance pricing and setting a price target of $284. BMO Capital Markets also maintained its Outperform rating on RenaissanceRe, with a $292 price target, highlighting an improved earnings estimate due to strong property reserve release trends and share repurchases. Additionally, RenaissanceRe announced an increase in its quarterly dividend and renewed its $750 million share repurchase program, marking the thirtieth consecutive year of dividend increases.
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