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Here's Why Investors Should Buy AXIS Capital (AXS) Stock Now
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AXIS Capital Holdings Limited’s (AXS - Free Report) compelling and diversified product portfolio, underwriting excellence, digital capabilities, solid capital position and favorable growth estimates make it worth adding to one’s portfolio.
Zacks Rank & Price Performance
AXIS Capital currently carries a Zacks Rank #2 (Buy). The stock has gained 15.8% over the past year compared with the industry’s growth of 30.6%.
Image Source: Zacks Investment Research
Earnings Surprise History
This specialty insurer has a solid record of beating earnings estimates in each of the last four quarters, the average being 102.57%.
Optimistic Growth Projection
The consensus estimate for AXIS Capital’s 2024 earnings per share indicates a year-over-year increase of 3% from the consensus estimate of 2023. The consensus estimate for 2024 revenues is pinned at $5.92 billion, implying a year-over-year improvement of 3.6% from the consensus mark of 2023. The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 10% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $6.37 billion, implying a year-over-year improvement of 7.4% from the consensus mark of 2024. The expected long-term earnings growth rate is 5%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 0.9% and 1.9% north, respectively, in the past 60 days, reflecting analyst optimism.
Business Tailwinds
AXS’ insurance business should benefit from a diversified portfolio of global specialty businesses, leadership positions and growth opportunities across major business lines. The Reinsurance business should benefit from strong cycle management that focuses on improving the business mix. The lines of business, on average, witnessed a double-digit rate increase. The insurer intensified its focus on attractive Casualty, Specialty, A&H and Credit lines.
This leading specialty insurer and global reinsurer is also working with its partners in distribution to use expanded digital capabilities to create new business growth. Aiming leadership in specialty risks, AXS remains focused on growth in marine cargo, cyber and renewable energy, which is likely to provide a strong double-digit return on equity (ROE) opportunities, as well as the pet insurance market via its accident and health lines of business.
The insurer’s solid capital position, aided by operational expertise, supports effective capital deployment. AXS has also hiked its dividend for 18 consecutive years at an eight-year CAGR (2015 – 2022) of 5.3%. Its dividend yield is currently 2.7%, way above the industry average of 0.2%. The insurer boasts one of the highest dividend yields among its peers.
Apart from this, AXS also has a $100 million share buyback remaining under its authorization for this year.
Attractive Valuation
Shares of AXS are trading at a book-to-price multiple of 1.14, lower than the industry average of 1.57.
It has a Value Score of A. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B and Zacks Rank #1 (Strong Buy) or 2 offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are HCI Group, Inc. (HCI - Free Report) , Palomar Holdings, Inc. (PLMR - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . While HCI Group and Palomar Holdings sport a Zacks Rank #1 each, Arch Capital carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCI Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 522.51%. In the past year, shares of HCI have surged 124.1%.
The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies year-over-year growth of 37.9% and 11.6%, respectively, from the consensus estimate of the corresponding years.
Palomar Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, shares of PLMR have soared 40.6%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 18%, respectively, from the consensus estimate of the corresponding years.
Arch Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 27.35%. In the past year, shares of ACGL have gained 32.8%.
The Zacks Consensus Estimate for ACGL’s 2025 earnings implies year-over-year growth of 8% from the consensus estimate of the corresponding year.
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Here's Why Investors Should Buy AXIS Capital (AXS) Stock Now
AXIS Capital Holdings Limited’s (AXS - Free Report) compelling and diversified product portfolio, underwriting excellence, digital capabilities, solid capital position and favorable growth estimates make it worth adding to one’s portfolio.
Zacks Rank & Price Performance
AXIS Capital currently carries a Zacks Rank #2 (Buy). The stock has gained 15.8% over the past year compared with the industry’s growth of 30.6%.
Image Source: Zacks Investment Research
Earnings Surprise History
This specialty insurer has a solid record of beating earnings estimates in each of the last four quarters, the average being 102.57%.
Optimistic Growth Projection
The consensus estimate for AXIS Capital’s 2024 earnings per share indicates a year-over-year increase of 3% from the consensus estimate of 2023. The consensus estimate for 2024 revenues is pinned at $5.92 billion, implying a year-over-year improvement of 3.6% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 10% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $6.37 billion, implying a year-over-year improvement of 7.4% from the consensus mark of 2024.
The expected long-term earnings growth rate is 5%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 0.9% and 1.9% north, respectively, in the past 60 days, reflecting analyst optimism.
Business Tailwinds
AXS’ insurance business should benefit from a diversified portfolio of global specialty businesses, leadership positions and growth opportunities across major business lines. The Reinsurance business should benefit from strong cycle management that focuses on improving the business mix. The lines of business, on average, witnessed a double-digit rate increase. The insurer intensified its focus on attractive Casualty, Specialty, A&H and Credit lines.
This leading specialty insurer and global reinsurer is also working with its partners in distribution to use expanded digital capabilities to create new business growth. Aiming leadership in specialty risks, AXS remains focused on growth in marine cargo, cyber and renewable energy, which is likely to provide a strong double-digit return on equity (ROE) opportunities, as well as the pet insurance market via its accident and health lines of business.
The insurer’s solid capital position, aided by operational expertise, supports effective capital deployment. AXS has also hiked its dividend for 18 consecutive years at an eight-year CAGR (2015 – 2022) of 5.3%. Its dividend yield is currently 2.7%, way above the industry average of 0.2%. The insurer boasts one of the highest dividend yields among its peers.
Apart from this, AXS also has a $100 million share buyback remaining under its authorization for this year.
Attractive Valuation
Shares of AXS are trading at a book-to-price multiple of 1.14, lower than the industry average of 1.57.
It has a Value Score of A. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B and Zacks Rank #1 (Strong Buy) or 2 offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are HCI Group, Inc. (HCI - Free Report) , Palomar Holdings, Inc. (PLMR - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . While HCI Group and Palomar Holdings sport a Zacks Rank #1 each, Arch Capital carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCI Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 522.51%. In the past year, shares of HCI have surged 124.1%.
The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies year-over-year growth of 37.9% and 11.6%, respectively, from the consensus estimate of the corresponding years.
Palomar Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, shares of PLMR have soared 40.6%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 18%, respectively, from the consensus estimate of the corresponding years.
Arch Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 27.35%. In the past year, shares of ACGL have gained 32.8%.
The Zacks Consensus Estimate for ACGL’s 2025 earnings implies year-over-year growth of 8% from the consensus estimate of the corresponding year.