RenaissanceRe (RNR) shares are likely faced with "meaningful" pricing and competitive headwinds, RBC Capital Markets said in a Tuesday note.

"We believe RenaissanceRe shares are likely limited by macro and investor sentiment," the report said.

The higher interest rates since 2022 and strong profitability has led to meaningful capital generation and new market entrances, pressuring pricing for its core property products, the note said.

"We expect these pressures to persist and see growth/margin pressures extending through 2028, limiting the company's underwriting operations," the report said.

Still, the report said the reinsurance company is expected to generate strong return-on-equity through the soft cycle on strong investment yields and prudent cycle management.

"With this view of a challenging macro but strong value creation, we initiate at Sector Perform," the note said. RBC set a price target of $365.

Price: 325.03, Change: -1.26, Percent Change: -0.39