Shares of backup power production provider Generac Holdings jumped more than 7% on Monday as Hurricane Milton swiftly intensified into a Category 5 storm.
The National Hurricane Center predicts that on Monday and Tuesday, Hurricane Milton will continue north of the Yucatan Peninsula before entering the Gulf of Mexico and approaching Florida’s west coast by Wednesday. Tampa Bay may see a storm surge of between 8 feet and 12 feet, according to forecasts.
Generac hit an intraday high of $174.08, up nearly 8.7% over Friday’s closing. The firm that generates power also reached a record 52-week high.
Hurricane Helene, which devastated much of the Southeast, especially North Carolina, and claimed over 220 lives, was followed closely by Hurricane Milton.
Conversely, insurance stocks exposed to weather catastrophes are declining due to probable insured losses associated with Hurricane Milton. Shares of Progressive, AIG, and Allstate fell more than 1%, while those of Travelers, Chubb, and Allstate fell more than 3%.
The Fort Lauderdale, Florida-based Universal Insurance saw a more than 15% decline as the hurricane-prone company with exposure to the Gulf Coast may see increased storm hazards.
Joshua Shanker, a research analyst at Bank of America, warned clients in a note on Monday that Milton might result in a significant decline in the companies’ fourth-quarter earnings, which would put pressure on the shares of property and casualty insurance underwriters and reinsurers.
This year’s “extremely active Atlantic hurricane season” has been predicted by forecasters for several months. This is because warm sea surface temperatures act as a hurricane’s fuel supply, according to Tropical Weather and Climate Research at Colorado State University.
