Market Overview

Deutsche Bank Upgrades RenaissanceRe To Buy

Share:

In a report published Monday, Deutsche Bank analysts upgraded RenaissanceRe Holdings Ltd. (NYSE: RNR) to Buy, while increasing the price target from $107 to $116. The analysts expect the company's buyback pace to pick up with the completion of the Platinum Underwriters acquisition.

Apart from the potential resumption of share buyback, the increasing appetite among third-party entities to diversify exposure has led to the risk to the company's stock declining significantly.

In addition, the analysts added that, "Risk of a negative ROE year (-13% in 2005 and -5% in 2011, as examples) has become increasingly remote, and our expectation is that RenRe can earn its cost of equity capital (89%) in a catastrophe "normal" year."

Apart from earnings related cash flows, RenaissanceRe is also likely to benefit from the freeing up of Platinum Underwriters' "underutilized" balance sheet. Additional cash flow could be created via the management's strategy to structure the company's U.S. entities in a way to offset the Platinum acquisition.

"While the Platinum acquisition diminishes the franchise, we believe some of RenRe's brand equity as the premier property-cat underwriter remains," the analysts said. The shares are trading at a 5 percent premium at present and the stock has not traded below book value since 2H10.

Latest Ratings for RNR

DateFirmActionFromTo
Jul 2019MaintainsMarket Perform
Jul 2019MaintainsUnderweight
May 2019MaintainsBuy

View More Analyst Ratings for RNR
View the Latest Analyst Ratings

Posted-In: Deutsche BankAnalyst Color Upgrades Price Target Analyst Ratings

 

Related Articles (RNR)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
CAPRMaintains12.4
BCELInitiates Coverage On23.0
DNOWMaintains14.0
HLIOMaintains46.0
GDIMaintains33.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Anchor Equity Partners, KKR and Management to Acquire a Controlling Stake in Groupon's Ticket Monster

RBC Capital Initiates Vista Outdoor At Outperform