Friday, June 24, 2022

RenaissanceRe Holdings Ltd. (RNR) Stock is Plummeting, Here is Why

Many stocks have been testing new highs in 2020, and one of the most notable is RenaissanceRe Holdings Ltd. (RNR). Currently, RNR is trading at $189.11 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $189.63.

To add more color to this target, the company’s high over the last year is $202.68 and the low is $113.27. Over the last 52 weeks, RNR is down -6.70% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, RNR reported a profit of $16.33 million. RenaissanceRe Holdings Ltd. also saw revenues increase to $896.26 million. In addition, RNR has free cash flow of $475.47 million as of 03-2020 The company’s EBITDA came in at $26.85 million which compares well with its peers.

About RenaissanceRe Holdings Ltd.

If readers are unfamiliar, RenaissanceRe Holdings Ltd. provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss retrocessional reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, and other windstorms, as well as claims arising from other natural and man-made catastrophes comprising tsunamis, winter storms, freezes, floods, fires, tornadoes, explosions and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, and binding facilities and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer’s liability, casualty clash, umbrella or excess casualty, workers’ compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes its products and services primarily through intermediaries. The company was founded in 1993 and is headquartered in Pembroke, Bermuda.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. RNR has a short ratio of 1.56 and outstanding shares of 43.44M.

Company Outlook

RNR has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 1.57 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 7.88. Investors should also keep an eye on sector updates as RNR has historically followed its peers on positive news.

All told, RenaissanceRe Holdings Ltd. RNR has strung together solid data and demonstrated underlying fundamentals. At its current valuation, RNR represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

RenaissanceRe Holdings Ltd. RNR is now commanding a market cap of 8.55B and a float of 43.36M. RNR is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of RNR stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in RNR, either long or short, and we have not been compensated for this article.

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