Shares of backup power generation company Generac Holdings surged more than 7% on Monday as Hurricane Milton rapidly strengthened into a Category 5 storm.
Hurricane Milton is forecast to move north of the Yucatan Peninsula on Monday and Tuesday before crossing the Gulf of Mexico to approach the west coast of Florida by Wednesday, according to the National Hurricane Center. Tampa Bay could face a storm surge of between 8 feet and 12 feet, according to forecasters.
Generac hit an intraday high of $174.08, up about 8.7% over Friday’s close. The power generation company also hit a new 52-week high.
Hurricane Milton comes on the heels of Hurricane Helene, which killed more than 220 people and wrought devastation across the Southeast, particularly in North Carolina.
Insurance stocks that have weather catastrophe exposure, meanwhile, are falling on potential insured losses tied to Hurricane Milton. Allstate, Travelers and Chubb saw their shares fall more than 3%, while Progressive and AIG all declined more than 1%.
Universal Insurance, based in Fort Lauderdale, Florida, plunged more than 15% as the catastrophe-prone carrier with Gulf Coast exposure could see heightened hurricane risks.
The shares of property and casualty insurance underwriters and reinsurers should come under pressure as Milton could result in a sharp reduction to their fourth-quarter earnings, Joshua Shanker, research analyst at Bank of America, told clients in a Monday note.
Forecasters have warned for months of an “extremely active Atlantic hurricane season” this year. This is due to warm sea surface temperatures that serve as a fuel source for hurricanes, according to Colorado State University Tropical Weather and Climate Research.