On Wednesday, Piper Sandler maintained a neutral rating. Renasant Company (NYSE:NYSE:) with a fixed price target of $33.00. This comes on the heels of Renasant’s recent announcement of the sale of its insurance subsidiary.
On July 2, 2024, Renasant Corp. announced the completion of the sale of Renasant Insurance, Inc. to Sunstar Insurance Group, LLC, effective July 1, 2024. The insurance operations will be rebranded as “Sunstar Insurance Services” and will retain its current leadership and eight offices in North and North Central Mississippi.
Renasant Corp. will maintain its strategic partnership with Sunstar, providing Renasant banking customers with continued access to Sunstar’s insurance and employee benefits offerings.
Renasant Insurance contributed slightly to the bank’s overall financial performance, accounting for approximately 1.5% of the bank’s total revenue in 2023 and approximately 2.3% of its net income, translating to approximately $0.07 in earnings per share (EPS).
The Piper Sandler analyst noted that the sale could have a modest positive impact on Renasant’s earnings per share once potential gains from the deal are realized.
The move represents a strategic reorganization of Renasant’s business operations, focusing on its core banking services while leveraging the partnership with Sunstar for insurance-related services.
Financial details of the sale, including potential gains, were not disclosed. Renasant’s financial strategy after the sale is expected to include deploying the proceeds in a way that benefits shareholders.
In other recent news, Renasant Corp reported strong first-quarter 2024 results, with earnings of $39.4 million, or $0.70 per diluted share, and strong growth in loans and deposits.
The company also announced the appointment of Kevin Chapman as its new CEO, who is scheduled to begin in May 2025. In a strategic move, Renasant Corp. divested its insurance assets to Sunstar Insurance Group, a deal that enables Renasant to restructure its securities portfolio and marks Sunstar’s entry into Mississippi. The divested entity, Renasant Insurance, which contributed 1.5% of Renasant’s total revenue, will be renamed Sunstar Insurance Services.
Truist Securities maintained its rating on Renasant stock at “Neutral” following the announcement. The developments reflect the company’s recent strategic changes and growth.
InvestingPro Insights
As Renasant Corp (NYSE:RNST) shifts from the recent sale of its insurance subsidiary to focus on its core banking operations, the company’s financial health has become an even more important factor for investors to consider. According to InvestingPro, Renasant Corp has a market cap of $1.72 billion and maintains a price-to-earnings (P/E) ratio of 12.47, which reflects its earnings relative to its stock price. Notably, the company has a long history of dividend reliability, with dividend payments for 32 consecutive years, a testament to its commitment to shareholder returns. This is evident in its dividend yield of 2.88% as of mid-2024.
In the context of the company’s financial performance, Renasant Corp. has shown profitability over the past twelve months, with an operating income margin of 28.51%. Analysts are optimistic about the company’s prospects, as they expect to achieve profitability for the current year. These insights may be of particular value to investors evaluating the company’s potential in light of the strategic shift that followed the sale of its insurance subsidiary.
For those looking to dig deeper into Renasant Corp’s financial metrics and strategic considerations, InvestingPro offers additional expert analysis and advice. Subscribers can use coupon code Pro News 24 Get up to 10% off your Pro Annual Subscription and Pro+ Annual or Semi-Annual Subscription, and access a comprehensive suite of tools and insights. There are 3 more InvestingPro tips available for Renasant Corp that can further guide your investment decisions.
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