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Axis Capital (AXS) Up 11.7% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Axis Capital (AXS - Free Report) . Shares have added about 11.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Axis Capital due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
AXIS Capital Q1 Earnings Surpass, Premiums Rise Y/Y
AXIS Capital Holdings Limited posted first-quarter 2024 operating income of $2.57 per share, beating the Zacks Consensus Estimate by 1.2%. The bottom line increased 10.3% year over year.
The insurer’s results reflected higher premiums earned, lower catastrophe losses, improved income from the fixed maturities portfolio and a rise in underwriting income.
Quarterly Operational Update
Total operating revenues of $1.4 billion missed the Zacks Consensus Estimate by 2.8%. The top line, however, rose 5% year over year on higher net premiums earned, net investment income and other insurance related income.
Net investment income jumped 25% year over year to $167 million, primarily attributable to a rise in income from the fixed maturities portfolio due to increased yields. Our estimate was $164.8 million.
Total expenses in the quarter under review rose 0.7% year over year to $1.15 billion, attributable to higher net losses and loss expenses, acquisition costs, interest expense and financing costs and reorganization expenses. Our estimate was $1.1 billion.
Pre-tax catastrophe and weather-related losses, and net of reinsurance were $20 million. This compares favorably with the year-ago loss of $38 million. AXIS Capital’s underwriting income of $145.6 million increased 4.5% year over year. Our estimate was $141.5 million. The combined ratio deteriorated 20 basis points (bps) to 91.1.
Segment Results
Insurance: Gross premiums written improved 11.2% year over year to $1.5 billion, primarily attributable to increases in all lines of business with the exception of cyber lines that decreased in the quarter, primarily due to premium adjustments and a reduction in premiums associated with program business. Our estimate was $1.6 billion. Net premiums earned increased 12.4% year over year to $917.9 million. Our estimate was $954.5 million. Underwriting income of $122.9 million climbed 19% year over year. Our estimate was $231 million. The combined ratio improved 70 bps to 86.6.
Reinsurance: Gross premiums written rose 11.8% year over year to $1 billion. The improvement was due to an increase of $139 million attributable to all ongoing specialty lines of business mainly related to new business and the timing of renewals of significant contracts. It was partially offset by a decrease in run-off lines. Our estimate was $943.8 million. Net premiums earned declined 17.8% year over year to $340 million. Our estimate was $352.1 million. Underwriting income of $22.6 million decreased 37% year over year. Our estimate was pegged at a loss of $89.5 million. The combined ratio deteriorated 440 bps year over year to 95.8.
Financial Update
AXIS Capital exited the first quarter with cash and cash equivalents of $1.14 billion, up 20% from the end of 2023. Debts were $1.3 billion at quarter-end, up 0.02% from the 2023-end level. As of Mar 31, 2024, book value per share grew 5.7% from the end of 2023 to $57.13, driven by net income, partially offset by common share dividends declared and unrealized investment losses. Annualized return on average common equity was 32.1% in the first quarter, which expanded 1,590 bps year over year.
Capital Deployment
As of Mar 31, 2024, AXIS Capital had $38 million of remaining authorization under the board-authorized share repurchase program for common share repurchases through Dec 31, 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Axis Capital has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Axis Capital has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Axis Capital is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Cincinnati Financial (CINF - Free Report) , a stock from the same industry, has gained 0%. The company reported its results for the quarter ended March 2024 more than a month ago.
Cincinnati Financial reported revenues of $2.32 billion in the last reported quarter, representing a year-over-year change of +8.8%. EPS of $1.72 for the same period compares with $0.89 a year ago.
Cincinnati Financial is expected to post earnings of $1.10 per share for the current quarter, representing a year-over-year change of -9.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.1%.
Cincinnati Financial has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Axis Capital (AXS) Up 11.7% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Axis Capital (AXS - Free Report) . Shares have added about 11.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Axis Capital due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
AXIS Capital Q1 Earnings Surpass, Premiums Rise Y/Y
AXIS Capital Holdings Limited posted first-quarter 2024 operating income of $2.57 per share, beating the Zacks Consensus Estimate by 1.2%. The bottom line increased 10.3% year over year.
The insurer’s results reflected higher premiums earned, lower catastrophe losses, improved income from the fixed maturities portfolio and a rise in underwriting income.
Quarterly Operational Update
Total operating revenues of $1.4 billion missed the Zacks Consensus Estimate by 2.8%. The top line, however, rose 5% year over year on higher net premiums earned, net investment income and other insurance related income.
Net investment income jumped 25% year over year to $167 million, primarily attributable to a rise in income from the fixed maturities portfolio due to increased yields. Our estimate was $164.8 million.
Total expenses in the quarter under review rose 0.7% year over year to $1.15 billion, attributable to higher net losses and loss expenses, acquisition costs, interest expense and financing costs and reorganization expenses. Our estimate was $1.1 billion.
Pre-tax catastrophe and weather-related losses, and net of reinsurance were $20 million. This compares favorably with the year-ago loss of $38 million. AXIS Capital’s underwriting income of $145.6 million increased 4.5% year over year. Our estimate was $141.5 million. The combined ratio deteriorated 20 basis points (bps) to 91.1.
Segment Results
Insurance: Gross premiums written improved 11.2% year over year to $1.5 billion, primarily attributable to increases in all lines of business with the exception of cyber lines that decreased in the quarter, primarily due to premium adjustments and a reduction in premiums associated with program business. Our estimate was $1.6 billion. Net premiums earned increased 12.4% year over year to $917.9 million. Our estimate was $954.5 million.
Underwriting income of $122.9 million climbed 19% year over year. Our estimate was $231 million. The combined ratio improved 70 bps to 86.6.
Reinsurance: Gross premiums written rose 11.8% year over year to $1 billion. The improvement was due to an increase of $139 million attributable to all ongoing specialty lines of business mainly related to new business and the timing of renewals of significant contracts. It was partially offset by a decrease in run-off lines. Our estimate was $943.8 million. Net premiums earned declined 17.8% year over year to $340 million. Our estimate was $352.1 million. Underwriting income of $22.6 million decreased 37% year over year. Our estimate was pegged at a loss of $89.5 million. The combined ratio deteriorated 440 bps year over year to 95.8.
Financial Update
AXIS Capital exited the first quarter with cash and cash equivalents of $1.14 billion, up 20% from the end of 2023. Debts were $1.3 billion at quarter-end, up 0.02% from the 2023-end level. As of Mar 31, 2024, book value per share grew 5.7% from the end of 2023 to $57.13, driven by net income, partially offset by common share dividends declared and unrealized investment losses. Annualized return on average common equity was 32.1% in the first quarter, which expanded 1,590 bps year over year.
Capital Deployment
As of Mar 31, 2024, AXIS Capital had $38 million of remaining authorization under the board-authorized share repurchase program for common share repurchases through Dec 31, 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
VGM Scores
At this time, Axis Capital has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Axis Capital has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Axis Capital is part of the Zacks Insurance - Property and Casualty industry. Over the past month, Cincinnati Financial (CINF - Free Report) , a stock from the same industry, has gained 0%. The company reported its results for the quarter ended March 2024 more than a month ago.
Cincinnati Financial reported revenues of $2.32 billion in the last reported quarter, representing a year-over-year change of +8.8%. EPS of $1.72 for the same period compares with $0.89 a year ago.
Cincinnati Financial is expected to post earnings of $1.10 per share for the current quarter, representing a year-over-year change of -9.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +2.1%.
Cincinnati Financial has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.