Zacks Investment Research upgraded shares of RenaissanceRe Holdings Ltd. (RNR) from NEUTRAL to OUTPERFORM on July 10, 2012, with a target price of $91.00.
We are upgrading our recommendation on RenaissanceRe to Outperform on the heels of the positive trend in premiums growth, increase in reinsurance capacity through the formation of Timicuan, stable ratings and regular dividend hikes. RenaissanceRe's first quarter earnings surpassed the Zacks Consensus Estimate owing to higher underwriting income arising from lack of catastrophic events in the quarter. While premiums and investment income exhibited growth, expenses also declined substantially, thereby boosting the bottom line. Moreover, improved financial leverage, cash balance and ROCE boosted the financial position. Additionally, enhanced operating leverage due to strategic divestitures along with efficient capital deployment are the other positives. However, the company historically faces significant challenges due to weather-related events and high competition in the catastrophe insurance and reinsurance segments.
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