A worker unloads a 24-kilowatt Generac home generator from a truck at Captain Electric on February 18, 2021 in Orem, Utah.
George Frey Getty Images
Shares from reserve power generation companies Generac Holdings increased more than 7% on Monday as Hurricane Milton quickly became a Category 5 storm.
Milton is expected to move north of the Yucatan Peninsula Monday and Tuesday before crossing the Gulf of Mexico to approach the west coast of Florida on Wednesday, according to the National Hurricane Center. Tampa Bay could face storm surges of eight to 12 feet, according to forecasts.
Generac hit an intraday high of $174.08, up about 8.7% on Friday. The power generation company also hit a new 52-week high.
Milton arrived during Hurricane Helene, which killed more than 220 people and wreaked havoc across the Southeast, especially in North Carolina.
Insurance stocks with weather exposure, meanwhile, are likely to incur insured losses related to Hurricane Milton. Allstate, Travel and Chubb saw shares fall more than 3%, while Progressive and AIG all declined by more than 1%.
Universal Insurance, based in Fort. Lauderdale, plunged more than 15% as disaster-prone carriers with Gulf Coast exposure could see increased hurricane risk.
Shares of property and casualty insurance underwriters and reinsurers should come under pressure as Milton can cause a sharp decline in fourth-quarter earnings, Joshua Shanker, research analyst at Bank of America, told clients in a note on Monday.
Forecasters have been warning for months of a “very active Atlantic hurricane season” this year. That’s because of warm sea surface temperatures that fuel hurricanes, according to Colorado State University Tropical Weather and Climate Research.
