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AXS Stock Trading at Discount to Industry at 1.38X: Time to Hold?
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AXIS Capital Holdings Limited’s (AXS - Free Report) shares are trading at a discount compared to the Zacks Property and Casualty Insurance industry. Its forward price-to-book value of 1.38X is lower than the industry average of 1.64X, the Finance sector’s 4.24X and the Zacks S&P 500 Composite’s 8.07X. The property and casualty insurer has a Value Score of B.
Image Source: Zacks Investment Research
The insurer has a market capitalization of $7.59 billion. The average volume of shares traded in the last three months was 0.6 million. The insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 9.17%.
Shares of The Travelers Companies, Inc. (TRV - Free Report) are also trading at a multiple higher than the industry average, while NMI Holdings Inc (NMIH - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) shares are trading at a discount.
AXS is an Outperformer
Shares of AXIS Capital have gained 48.5% in the past year, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 16.5%, 25.5% and 24.1%, respectively.
AXS Outperforms Industry, Sector & S&P
Image Source: Zacks Investment Research
AXS Trading Above 50-Day and 200-Day Moving Averages
Shares of AXIS Capital closed at $91.50 on Wednesday, near its 52-week high of $94.89. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $90.04 and $79.87, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
AXS’ Growth Projection Encourages
The Zacks Consensus Estimate for AXIS Capital’s 2025 earnings per share indicates a year-over-year increase of 0.1%. The consensus estimate for revenues is pegged at $6.76 billion, implying a year-over-year improvement of 10.8%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 10.1% and 6.4%, respectively, from the corresponding 2024 estimates.
Earnings have grown 67.1% in the past five years, better than the industry average of 19.3%.
AXIS Capital’s Favorable Return on Capital
Return on equity in the trailing 12 months was 18.8%, better than the industry average of 7.6%. This highlights the company’s efficiency in utilizing shareholders’ funds.
Also, the return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting AXS’ efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 11.6%, better than the industry average of 5.8%.
Factors Acting in Favor of AXS
AXIS Capital aims to be a leading specialty underwriter and thus focuses on growth areas, including wholesale insurance and lower middle markets. Lowering risk exposure while concentrating on accident and health, excess and supply property, casualty, credit and surety, and specialty reinsurance lines bodes well for growth.
The Insurance segment is poised to 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, focusing on improving the business mix.
AXIS Capital stays focused on expanding digital capabilities to create new business growth in desirable smaller accounts. Simplifying operating structure, delivering efficiencies and capitalizing on productivity gains should help it achieve a general and administrative ratio of less than 11% by 2026.
Strategic initiatives have been driving improvement in its operating earnings over the past few years.
Axis Capital’s Impressive Dividend History
Axis Capital's dividend track record is impressive. It hiked its dividend for 18 straight years and currently yields 1.9%, way above the industry average of 0.2%. The insurer boasts one of the highest dividend yields among its peers.
Conclusion
This leading specialty insurer and global reinsurer, which aims to lead in specialty risks, has been repositioning its portfolio and strengthening its book of businesses. Focusing on prudently deploying resources while enhancing efficiencies, improving its portfolio mix and underwriting profitability poises Axis Capital for growth.
Image: Shutterstock
AXS Stock Trading at Discount to Industry at 1.38X: Time to Hold?
AXIS Capital Holdings Limited’s (AXS - Free Report) shares are trading at a discount compared to the Zacks Property and Casualty Insurance industry. Its forward price-to-book value of 1.38X is lower than the industry average of 1.64X, the Finance sector’s 4.24X and the Zacks S&P 500 Composite’s 8.07X. The property and casualty insurer has a Value Score of B.
Image Source: Zacks Investment Research
The insurer has a market capitalization of $7.59 billion. The average volume of shares traded in the last three months was 0.6 million. The insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 9.17%.
Shares of The Travelers Companies, Inc. (TRV - Free Report) are also trading at a multiple higher than the industry average, while NMI Holdings Inc (NMIH - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) shares are trading at a discount.
AXS is an Outperformer
Shares of AXIS Capital have gained 48.5% in the past year, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 16.5%, 25.5% and 24.1%, respectively.
AXS Outperforms Industry, Sector & S&P
Image Source: Zacks Investment Research
AXS Trading Above 50-Day and 200-Day Moving Averages
Shares of AXIS Capital closed at $91.50 on Wednesday, near its 52-week high of $94.89. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $90.04 and $79.87, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
AXS’ Growth Projection Encourages
The Zacks Consensus Estimate for AXIS Capital’s 2025 earnings per share indicates a year-over-year increase of 0.1%. The consensus estimate for revenues is pegged at $6.76 billion, implying a year-over-year improvement of 10.8%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 10.1% and 6.4%, respectively, from the corresponding 2024 estimates.
Earnings have grown 67.1% in the past five years, better than the industry average of 19.3%.
AXIS Capital’s Favorable Return on Capital
Return on equity in the trailing 12 months was 18.8%, better than the industry average of 7.6%. This highlights the company’s efficiency in utilizing shareholders’ funds.
Also, the return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting AXS’ efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 11.6%, better than the industry average of 5.8%.
Factors Acting in Favor of AXS
AXIS Capital aims to be a leading specialty underwriter and thus focuses on growth areas, including wholesale insurance and lower middle markets. Lowering risk exposure while concentrating on accident and health, excess and supply property, casualty, credit and surety, and specialty reinsurance lines bodes well for growth.
The Insurance segment is poised to 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, focusing on improving the business mix.
AXIS Capital stays focused on expanding digital capabilities to create new business growth in desirable smaller accounts. Simplifying operating structure, delivering efficiencies and capitalizing on productivity gains should help it achieve a general and administrative ratio of less than 11% by 2026.
Strategic initiatives have been driving improvement in its operating earnings over the past few years.
Axis Capital’s Impressive Dividend History
Axis Capital's dividend track record is impressive. It hiked its dividend for 18 straight years and currently yields 1.9%, way above the industry average of 0.2%. The insurer boasts one of the highest dividend yields among its peers.
Conclusion
This leading specialty insurer and global reinsurer, which aims to lead in specialty risks, has been repositioning its portfolio and strengthening its book of businesses. Focusing on prudently deploying resources while enhancing efficiencies, improving its portfolio mix and underwriting profitability poises Axis Capital for growth.
Its impressive dividend history, solid growth projections as well as attractive valuations are other positives. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.