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AXIS Capital (AXS) Rises 30% YTD: What's Driving the Stock?
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Shares of AXIS Capital Holdings Limited (AXS - Free Report) have rallied 30.4% year to date, compared with the industry’s increase of 21%, the Finance sector’s rise of 11.4% and the Zacks S&P 500 composite’s rise of 15%.
A compelling and diversified product portfolio, underwriting excellence, digital capabilities and solid capital position continue to drive this Zacks Rank #2 (Buy) specialty and global reinsurer.
AXS, aiming for leadership in specialty risks, has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
The Zacks Consensus Estimate for Axis Capital’s 2025 earnings has moved 0.4% north in the past seven days, reflecting analyst optimism.
Image Source: Zacks Investment Research
Factors Acting in Favor of AXS
AXIS Capital envisions being a leading specialty underwriter and thus focuses on growth areas, including wholesale insurance and lower middle markets. Its exit from the volatile catastrophe and property reinsurance space and reducing risk exposure while concentrating on accident and health, 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 that focuses 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.
Optimistic Growth Projection
The Zacks Consensus Estimate for 2024 earnings is pegged at $10.04, indicating an increase of 1.9% on 4.5% higher revenues of $6 billion. The consensus estimate for 2025 earnings is pegged at $11.05, indicating an increase of 10.1% on 9% higher revenues of $6.5 billion.
The expected long-term earnings growth rate is pegged at 27.1%, better than the industry average of 10.7%. We expect 2026 EPS to witness a three-year CAGR of 6.9%.
Impressive Dividend History
Axis Capital has an impressive history of distributing wealth to shareholders via dividends and share buybacks. It hiked its dividend for 18 straight years. Its dividend yield is currently 2.4%, way above the industry average of 0.3%. The insurer boasts one of the highest dividend yields among its peers.
Return on Capital
AXS’ trailing 12-month return on equity is 19.1%, ahead of the industry average of 7.8%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Also, the return on invested capital (ROIC) in the trailing 12 months was 11.1%, better than the industry average of 5.9%. 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.
Undervalued Shares
AXS shares are trading at a price-to-book multiple of 1.2, lower than the industry average of 1.6.
Pricing at a discount to the industry average gives a better entry point to investors. Also, it has a Value Score of A.
RLI Corporation’s earnings surpassed estimates in three of the last four quarters while missing in one, the average beat being 132.39%. Year to date, shares of RLI have gained 8.2%.
The Zacks Consensus Estimate for RLI’s 2024 and 2025 earnings implies 18.2% and 4.1% year-over-year growth, respectively.
Palomar’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 15.10%. Year to date, PLMR’s stock has surged 65.8%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings indicates 26.3% and 18.5% year-over-year growth, respectively.
ProAssurance earnings surpassed estimates in two of the last four quarters and missed in the other two. Year to date, PRA’s stock has lost 12.4%.
The Zacks Consensus Estimate for PRA’s 2024 and 2025 earnings implies 371.4% and 72.6% year-over-year growth, respectively.
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AXIS Capital (AXS) Rises 30% YTD: What's Driving the Stock?
Shares of AXIS Capital Holdings Limited (AXS - Free Report) have rallied 30.4% year to date, compared with the industry’s increase of 21%, the Finance sector’s rise of 11.4% and the Zacks S&P 500 composite’s rise of 15%.
A compelling and diversified product portfolio, underwriting excellence, digital capabilities and solid capital position continue to drive this Zacks Rank #2 (Buy) specialty and global reinsurer.
AXS, aiming for leadership in specialty risks, has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
The Zacks Consensus Estimate for Axis Capital’s 2025 earnings has moved 0.4% north in the past seven days, reflecting analyst optimism.
Image Source: Zacks Investment Research
Factors Acting in Favor of AXS
AXIS Capital envisions being a leading specialty underwriter and thus focuses on growth areas, including wholesale insurance and lower middle markets. Its exit from the volatile catastrophe and property reinsurance space and reducing risk exposure while concentrating on accident and health, 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 that focuses 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.
Optimistic Growth Projection
The Zacks Consensus Estimate for 2024 earnings is pegged at $10.04, indicating an increase of 1.9% on 4.5% higher revenues of $6 billion. The consensus estimate for 2025 earnings is pegged at $11.05, indicating an increase of 10.1% on 9% higher revenues of $6.5 billion.
The expected long-term earnings growth rate is pegged at 27.1%, better than the industry average of 10.7%. We expect 2026 EPS to witness a three-year CAGR of 6.9%.
Impressive Dividend History
Axis Capital has an impressive history of distributing wealth to shareholders via dividends and share buybacks. It hiked its dividend for 18 straight years. Its dividend yield is currently 2.4%, way above the industry average of 0.3%. The insurer boasts one of the highest dividend yields among its peers.
Return on Capital
AXS’ trailing 12-month return on equity is 19.1%, ahead of the industry average of 7.8%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Also, the return on invested capital (ROIC) in the trailing 12 months was 11.1%, better than the industry average of 5.9%. 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.
Undervalued Shares
AXS shares are trading at a price-to-book multiple of 1.2, lower than the industry average of 1.6.
Pricing at a discount to the industry average gives a better entry point to investors. Also, it has a Value Score of A.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are RLI Corporation (RLI - Free Report) , Palomar Holdings (PLMR - Free Report) and ProAssurance Corporation (PRA - Free Report) . Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RLI Corporation’s earnings surpassed estimates in three of the last four quarters while missing in one, the average beat being 132.39%. Year to date, shares of RLI have gained 8.2%.
The Zacks Consensus Estimate for RLI’s 2024 and 2025 earnings implies 18.2% and 4.1% year-over-year growth, respectively.
Palomar’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 15.10%. Year to date, PLMR’s stock has surged 65.8%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings indicates 26.3% and 18.5% year-over-year growth, respectively.
ProAssurance earnings surpassed estimates in two of the last four quarters and missed in the other two. Year to date, PRA’s stock has lost 12.4%.
The Zacks Consensus Estimate for PRA’s 2024 and 2025 earnings implies 371.4% and 72.6% year-over-year growth, respectively.