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AXS Outperforms Industry, Trades at a Discount: How to Play the Stock
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Key Takeaways
AXS focuses on growth areas like wholesale insurance, lower middle markets, and specialty reinsurance lines.
AXS invests in digital capabilities and aims to reduce its G&A expense ratio to below 11% by 2026.
AXS repositioned its business for specialty risk leadership, focusing on underwriting profitability.
Shares of AXIS Capital Holdings Limited (AXS - Free Report) have gained 14.2% in the past year, outperforming its industry’s growth of 6.3%. The insurer has a market capitalization of $7.33 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 13.39%.
Image Source: Zacks Investment Research
Attractive Valuation of AXS
AXIS Capital’s shares are trading at a discount compared to the industry. Its forward price-to-book value of 1.3X is lower than the industry average of 1.56X, the Finance sector’s 4.33X and the Zacks S&P 500 Composite’s 8.81X. Also, it has a Value Score of B.
AXS is also cheaper compared with The Travelers Companies, Inc. (TRV - Free Report) , Arch Capital Group Ltd. (ACGL - Free Report) and American Financial Group, Inc. (AFG - Free Report) . Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
AXS’ Encouraging Growth Projection
The Zacks Consensus Estimate for AXIS Capital’s 2025 earnings per share indicates a year-over-year increase of 6.8%. The consensus estimate for revenues is pegged at $6.43 billion, implying a year-over-year improvement of 5.5%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 4.4% and 6.9%, respectively, from the corresponding 2025 estimates. Earnings have grown 67.1% in the past five years, better than the industry average of 21.6%.
Optimist Analyst Sentiment on AXS
One of the four analysts covering the stock has raised estimates for 2025, and two analysts have raised the same for 2026 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved up 0.8% and 0.4%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
Average Target Price for AXS Suggests Upside
Based on short-term price targets offered by eight analysts, the Zacks average price target is $113.50 per share. The average suggests a potential 20.49% upside from the last closing price.
Image Source: Zacks Investment Research
AXIS Capital’s Higher Return on Capital
Return on equity in the trailing 12 months was 18.7%, better than the industry average of 7.6%. This highlights the company’s efficiency in utilizing shareholders’ funds.
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 and 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 1.7%, way above the industry average of 0.2%. The insurer boasts one of the highest dividend yields among its peers.
End Notes
This leading specialty insurer and global reinsurer, which aims to lead in specialty risks, has been repositioning its portfolio and strengthening its book of business. Focusing on prudently deploying resources while enhancing efficiencies, improving its portfolio mix and underwriting profitability, poises Axis Capital for growth.
Coupled with the impressive dividend history, higher return on capital, solid growth projections, as well as attractive valuations, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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AXS Outperforms Industry, Trades at a Discount: How to Play the Stock
Key Takeaways
Shares of AXIS Capital Holdings Limited (AXS - Free Report) have gained 14.2% in the past year, outperforming its industry’s growth of 6.3%.
The insurer has a market capitalization of $7.33 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 13.39%.
Image Source: Zacks Investment Research
Attractive Valuation of AXS
AXIS Capital’s shares are trading at a discount compared to the industry. Its forward price-to-book value of 1.3X is lower than the industry average of 1.56X, the Finance sector’s 4.33X and the Zacks S&P 500 Composite’s 8.81X. Also, it has a Value Score of B.
AXS is also cheaper compared with The Travelers Companies, Inc. (TRV - Free Report) , Arch Capital Group Ltd. (ACGL - Free Report) and American Financial Group, Inc. (AFG - Free Report) .
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
AXS’ Encouraging Growth Projection
The Zacks Consensus Estimate for AXIS Capital’s 2025 earnings per share indicates a year-over-year increase of 6.8%. The consensus estimate for revenues is pegged at $6.43 billion, implying a year-over-year improvement of 5.5%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 4.4% and 6.9%, respectively, from the corresponding 2025 estimates.
Earnings have grown 67.1% in the past five years, better than the industry average of 21.6%.
Optimist Analyst Sentiment on AXS
One of the four analysts covering the stock has raised estimates for 2025, and two analysts have raised the same for 2026 over the past 60 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved up 0.8% and 0.4%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
Average Target Price for AXS Suggests Upside
Based on short-term price targets offered by eight analysts, the Zacks average price target is $113.50 per share. The average suggests a potential 20.49% upside from the last closing price.
Image Source: Zacks Investment Research
AXIS Capital’s Higher Return on Capital
Return on equity in the trailing 12 months was 18.7%, better than the industry average of 7.6%. This highlights the company’s efficiency in utilizing shareholders’ funds.
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 and 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 1.7%, way above the industry average of 0.2%. The insurer boasts one of the highest dividend yields among its peers.
End Notes
This leading specialty insurer and global reinsurer, which aims to lead in specialty risks, has been repositioning its portfolio and strengthening its book of business. Focusing on prudently deploying resources while enhancing efficiencies, improving its portfolio mix and underwriting profitability, poises Axis Capital for growth.
Coupled with the impressive dividend history, higher return on capital, solid growth projections, as well as attractive valuations, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.