UPDATE: Nomura Initiates Coverage on RenaissanceRe Holdings with Reduce Rating, $80 PT on Uncertainty Ahead

In a report published Wednesday, Nomura analyst Cliff Gallant initiated coverage on

with a Reduce rating and $80.00 price target. In the report, Nomura noted, “An impressive track record of high ROEs and underwriting profits despite being a catastrophe-focused reinsurer give the stock a well-deserved premium valuation versus peers, in our view. However, new sources of capital have been rapidly entering the catastrophe reinsurance marketplace, which we expect will pressure pricing. We believe shares could decline in a worsening pricing environment. Our PT of $80 reflects a 1.1x book value multiple, a premium to the peer group at 0.9–1.0x, but below peak multiples of a rising-rate environment due in part to increased competition that will pressure pricing.” RenaissanceRe Holdings closed on Tuesday at $86.05.