Is RenaissanceRe Holdings (RNR) Negatively Impacted By the LA Wildfires?

We recently published a list of 5 Stocks Negatively Impacted By The LA Wildfires. In this article, we are going to take a look at where RenaissanceRe Holdings Ltd. (NYSE:RNR) stands against other stocks negatively impacted by the LA wildfires.

According to a recent estimate by Goldman Sachs, losses to insurance companies resulting from the Los Angeles wildfires could be as high as $30 billion. Consequently, many insurance stocks, particularly property and casualty insurance companies, have been trading down or sideways since the fires started. Utility companies in the area are also struggling to figure out the extent of the damages as well as their future prospects in the region.

Even today, a large portion of the fire remains uncontrolled, left at the mercy of the strong LA winds to determine the direction in which it will spread. Insurance companies will not only have to settle claims quickly but are also uncertain how much more the fires will spread. We looked at the companies that are negatively impacted by these events and whose stock is feeling the heat from the fires.

To come up with the 5 stocks that are negatively impacted by the LA wildfires, we only considered companies with a market cap of at least $10 billion.

A top-view of a large city skyline, exemplifying the power and the protection of a reinsurance company.

RenaissanceRe Holdings Ltd. (NYSE:RNR)

RenaissanceRe Holdings (NYSE:RNR) provides insurance and reinsurance services across the globe. Its stock enjoyed considerable gains in 2024, which were set to continue were it not for the LA wildfires. The stock is trading flat so far this year as everyone tries to assess the extent of the damage.

Despite a strong price action until December 2024, all was not well with the company. Analysts are pessimistic about the company’s growth prospects, with Jeffries downgrading the stock from Buy to Hold last month. The target price was subsequently cut from $304 to $282. The 2025 and 2026 EPS estimates were also lowered, though they are still higher than the industry-wide consensus estimates.

The management is also buying back the company’s stock despite its decent run in 2024. The ongoing crisis in LA and the resulting share price drop could be an opportunity for the company to accelerate this buyback.

Overall, RNR ranks 2nd on our list of stocks negatively impacted by the LA wildfires. While we acknowledge the potential of RNR as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as RNR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.