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AXS Stock Near 52-Week High: Should You Buy or Wait for a Pullback?
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Shares of AXIS Capital Holdings (AXS - Free Report) closed at $77.67 on Friday, near a 52-week high of $80.50. A compelling and diversified product portfolio, underwriting excellence, digital capabilities and solid capital position are driving the price higher.
This leading specialty insurer and global reinsurer aiming leadership in specialty risks have been repositioning the portfolio, and its stronger book of businesses has less inherent volatility.
Shares of the company have gained 40.3% year to date, outperforming the industry’s increase of 26%, the Finance sector’s rise of 13.2% and the Zacks S&P 500 Composite’s increase of 17.9% in the said time frame.
AXS Outperforms Industry, Fiance, S&P 500 YTD
Image Source: Zacks Investment Research
AXS Trading Above 50-Day Moving Average
AXS shares are trading well above the 50-day moving average, indicating a bullish trend. Shares are trading near the high end of its 52-week range.
All four analysts covering the stock raised estimates for the current and next year. The Zacks Consensus Estimate for Axis Capital’s 2024 and 2025 earnings has moved 6.7% and 5.3% north, respectively, in the past 60 days, reflecting analyst optimism.
Image Source: Zacks Investment Research
Factors Acting in Favor of AXS
AXIS Capital’s focus on growth areas, including wholesale insurance and lower middle markets, concentrating on accident and health, excess and supply property, casualty, credit and surety, and specialty reinsurance lines, bodes well for growth. Insurer’s exit from the volatile catastrophe and property reinsurance space lowered risk exposure, safeguarding profit erosion.
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 is also working with its distribution partners to use expanding digital capabilities to create new business growth in desirable smaller accounts. This, coupled with 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. Earnings grew 82.7% in the last five years, outperforming the industry average of 10.5%.
Optimistic Growth Projection for AXS
The Zacks Consensus Estimate for 2024 earnings per share (EPS) is pegged at $10.71, indicating an increase of 8.7% on 7.1% higher revenues of $6.1 billion. The consensus estimate for 2025 EPS is pegged at $11.64, indicating an increase of 8.7% on 9.9% higher revenues of $6.7 billion.
The expected long-term earnings growth rate is pegged at 27.8%, better than the industry average of 11.1%. We expect 2026 EPS to witness a three-year CAGR of 9.4%.
AXS’ Return on Capital
AXS’ trailing 12-month return on equity is 19.7%, ahead of the industry average of 8%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Image Source: Zacks Investment Research
Also, the return on invested capital (ROIC) in the trailing 12 months was 11.65%, better than the industry average of 6.1%. Its ROIC has been increasing over the last few quarters amid capital investment made over the same time frame. This reflects the company’s efficiency in utilizing funds to generate income.
Image Source: Zacks Investment Research
Axis Capital Shares Are Undervalued
AXS shares are trading at a price-to-book multiple of 1.28, lower than the industry average of 1.58.
Image Source: Zacks Investment Research
Its pricing at a discount to the industry average gives a better entry point to investors. Also, it has a Value Score of A.
Shares of other insurers like EverestGroup (EG - Free Report) and RenaissanceRe Holdings Ltd (RNR - Free Report) are also trading at a multiple lower than the industry average.
Parting Thoughts
Focus on deploying resources prudently while enhancing efficiencies, improving its portfolio mix and underwriting profitability poise Axis Capital for growth.
Its dividend history impresses. While AXS hiked dividend for 18 straight years, the dividend currently yields 2.3%, way above the industry average of 0.3%. The insurer boasts one of the highest dividend yields among its peers, making it an attractive pick for yield-seeking investors.
It has a VGM Score of A and has a Zacks Rank #2 (Buy) making it an attractive investment option, according to Zacks' proprietary methodology. Given its attractive valuation and upbeat prospects, AXS is a strong contender to be added to one’s portfolio. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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AXS Stock Near 52-Week High: Should You Buy or Wait for a Pullback?
Shares of AXIS Capital Holdings (AXS - Free Report) closed at $77.67 on Friday, near a 52-week high of $80.50. A compelling and diversified product portfolio, underwriting excellence, digital capabilities and solid capital position are driving the price higher.
This leading specialty insurer and global reinsurer aiming leadership in specialty risks have been repositioning the portfolio, and its stronger book of businesses has less inherent volatility.
Shares of the company have gained 40.3% year to date, outperforming the industry’s increase of 26%, the Finance sector’s rise of 13.2% and the Zacks S&P 500 Composite’s increase of 17.9% in the said time frame.
AXS Outperforms Industry, Fiance, S&P 500 YTD
Image Source: Zacks Investment Research
AXS Trading Above 50-Day Moving Average
AXS shares are trading well above the 50-day moving average, indicating a bullish trend. Shares are trading near the high end of its 52-week range.
AXS Price Movement vs. 50-Day Moving Average
Image Source: Zacks Investment Research
AXS’ Northbound Estimate Revision Instill Confidence
All four analysts covering the stock raised estimates for the current and next year. The Zacks Consensus Estimate for Axis Capital’s 2024 and 2025 earnings has moved 6.7% and 5.3% north, respectively, in the past 60 days, reflecting analyst optimism.
Image Source: Zacks Investment Research
Factors Acting in Favor of AXS
AXIS Capital’s focus on growth areas, including wholesale insurance and lower middle markets, concentrating on accident and health, excess and supply property, casualty, credit and surety, and specialty reinsurance lines, bodes well for growth. Insurer’s exit from the volatile catastrophe and property reinsurance space lowered risk exposure, safeguarding profit erosion.
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 is also working with its distribution partners to use expanding digital capabilities to create new business growth in desirable smaller accounts. This, coupled with 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. Earnings grew 82.7% in the last five years, outperforming the industry average of 10.5%.
Optimistic Growth Projection for AXS
The Zacks Consensus Estimate for 2024 earnings per share (EPS) is pegged at $10.71, indicating an increase of 8.7% on 7.1% higher revenues of $6.1 billion. The consensus estimate for 2025 EPS is pegged at $11.64, indicating an increase of 8.7% on 9.9% higher revenues of $6.7 billion.
The expected long-term earnings growth rate is pegged at 27.8%, better than the industry average of 11.1%. We expect 2026 EPS to witness a three-year CAGR of 9.4%.
AXS’ Return on Capital
AXS’ trailing 12-month return on equity is 19.7%, ahead of the industry average of 8%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Image Source: Zacks Investment Research
Also, the return on invested capital (ROIC) in the trailing 12 months was 11.65%, better than the industry average of 6.1%. Its ROIC has been increasing over the last few quarters amid capital investment made over the same time frame. This reflects the company’s efficiency in utilizing funds to generate income.
Image Source: Zacks Investment Research
Axis Capital Shares Are Undervalued
AXS shares are trading at a price-to-book multiple of 1.28, lower than the industry average of 1.58.
Image Source: Zacks Investment Research
Its pricing at a discount to the industry average gives a better entry point to investors. Also, it has a Value Score of A.
Shares of other insurers like EverestGroup (EG - Free Report) and RenaissanceRe Holdings Ltd (RNR - Free Report) are also trading at a multiple lower than the industry average.
Parting Thoughts
Focus on deploying resources prudently while enhancing efficiencies, improving its portfolio mix and underwriting profitability poise Axis Capital for growth.
Its dividend history impresses. While AXS hiked dividend for 18 straight years, the dividend currently yields 2.3%, way above the industry average of 0.3%. The insurer boasts one of the highest dividend yields among its peers, making it an attractive pick for yield-seeking investors.
It has a VGM Score of A and has a Zacks Rank #2 (Buy) making it an attractive investment option, according to Zacks' proprietary methodology. Given its attractive valuation and upbeat prospects, AXS is a strong contender to be added to one’s portfolio. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.