Zacks Investment Research downgraded shares of RenaissanceRe Holdings Ltd. (RNR) from NEUTRAL to UNDERPERFORM on August 29, 2014, with a target price of $93.00.
We are downgrading our recommendation on RenaissanceRe to Underperform based on downward estimate revisions. RenaissanceRe's second-quarter earnings fell short of the Zacks Consensus Estimate but improved year over year on proper risk-assessment. Going ahead, the adverse effects of weak investment portfolio and catastrophe exposures are likely to weigh on positives like risk-assessment and disciplined underwriting. Also accelerated share buybacks and annual dividend hikes are expected to boost investors' return. Moreover, headwinds related to volatile investment income, intense competition and risks from catastrophe businesses raise concerns. Nevertheless, the restructuring and strategic divestitures and strong ratings raise creditworthiness and boost investor confidence. However a soft financial position and a decline in gross premiums written in the quarter raises caution.
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