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Axis Capital and Aviat Networks have been highlighted as Zacks Bull and Bear of the Day
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For Immediate Release
Chicago, IL – September 24, 2024 – Zacks Equity Research shares Axis Capital Holdings' (AXS - Free Report) as the Bull of the Day and Aviat Networks (AVNW - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Royal Caribbean Cruises Ltd.'s (RCL - Free Report) , Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and Carnival Corp. & plc (CCL - Free Report) .
Axis Capital Holdings' stock stands out among the Zacks Insurance-Property and Casualty Industry which is currently in the top 8% of over 250 Zacks industries.
Providing a broad range of specialty insurance and reinsurance services, Axis Capital has a global reach through its operating subsidiaries that extend to markets in the US, Bermuda, Europe, Singapore, Canada, Latin America, and the Middle East.
Added to the Zacks Rank #1 (Strong Buy) list this week, AXS lands the Bull of the Day and checks an overall "A" VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum.
AXS Performance Overview
Demand for insurance-related services has remained resilient despite broader inflationary concerns. Because of the essentiality of insurance, conglomerates such as Axis Capital have continued to expand and can also reward shareholders with generous dividends.
To that point, when including dividends, AXS has a total return of +90% over the last three years which has impressively topped the broader indexes and its industry's return of +50%.
Year to date, AXS has soared over +40% to top the Zacks Insurance-Property and Casualty Market's +28%. This has also topped the +20% gains of the S&P 500 and Nasdaq this year.
Attractive Growth Trajectory
Having a steady revenue stream, Axis Capital's total sales are now expected to be up 7% in fiscal 2024 and are projected to rise another 10% in FY25 to $6.73 billion. Furthermore, FY25 sales projections would represent 30% growth since the pandemic with 2019 sales at $5.17 billion.
On the bottom line, Axis Capital is expecting 8% EPS growth in FY24 and FY25. More astonishing, is that FY25 EPS projections of $11.64 would be a 362% increase from pre-pandemic earnings of $2.52 per share in 2019.
Enticing Valuation & Dividend
Despite a very impressive YTD rally, AXS still trades at just 7.2X forward earnings which is well below the benchmark S&P 500's 24.1X.
Even better, Axis Capital's stock is trading at a nice discount to its industry average of 13.6X forward earnings with some noteworthy peers being The Progressive Corporation PGR and ProAssurance Corporation PRA.
Adding more value to AXS is that Axis Capital's 2.24% annual dividend yield impressively tops the benchmarks' 1.24% average and its industry average of 0.16%.
Axis Capital's 16% payout ratio and increased probability also indicates there is plenty of room for the insurance giant to raise its dividend in the future.
Bottom Line
Earnings estimate revisions have remained higher for Axis Capital's FY24 and FY25, making now an ideal time to buy AXS considering the company's expansive growth trajectory. This also magnifies Axis Capital's appealing P/E valuation and alludes to the notion that the strong price performance of AXS should continue.
Among the tech sector, one stock that could surprise investors in terms of more downside risk is Aviat Networks. While Aviat's growth and valuation may be attractive on the surface, the global supplier of wireless network solutions has been entrenched in scrutiny.
Considering such, it may be best to avoid Aviat's stock at the moment which lands a Zacks Rank #5 (Strong Sell) and the Bear of the Day.
Aviat is Losing Investor Confidence
Investor confidence in Aviat's stock has started to sour following legal investigations by multiple law firms. Earlier in the month, Aviat stated it wouldn't be able to timely file its annual report after identifying certain errors impacting previously reported financial information for its current fiscal 2024 and FY23.
News of such has caused Aviat's stock to plummet -17% in September. Furthermore, AVNW is now down more than -30% year to date to vastly underperform the broader indexes and its Zacks Wireless Equipment Market's +25%.
Negative Zacks ESP
On top of mounting concerns in regard to accounting practices, the Zacks ESP (Expected Surprise Prediction) also indicates Aviat could miss its fiscal fourth quarter earnings expectations with the company scheduled to report on Wednesday, September 25.
To that point, the Most Accurate Estimate for Aviat's Q4 EPS is at $0.62 and -6% below the Zacks Consensus of $0.66 per share.
Declining EPS Revisions
Notably, Aviat's Q4 earnings estimate revisions have declined -16% from estimates of $0.79 per share 30 days ago. In the last month annual earnings estimates for FY24 and FY25 have declined -4% and -7% respectively.
Final Thoughts
Unfortunately, the old saying of when there is smoke there's fire may apply to Aviat's stock. Considering the wireless network provider is dealing with financial accounting probes, declining earnings estimate revisions is another tell-tale sign that it may be best to avoid Aviat's stock at the moment.
Additional content:
Is Royal Caribbean Stock a Buy, Sell or Hold Right Now?
Royal Caribbean Cruises Ltd.'s stock is trading at a discount compared with the Zacks Leisure and Recreation Servicesindustry. With a forward 12-month Price/Earnings ratio of 13.5x, it sits below the industry average of 16.88x and the Consumer Discretionary sector's 17.6x.
The stock's performance has been stellar, soaring 91.3% in the past year. The metric outpaced the industry's 21.3% rise and the S&P 500's 31.1% appreciation. During the same period, the Consumer Discretionary sector advanced just 15.2%. RCL has outperformed some other industry players, comprising Norwegian Cruise Line Holdings Ltd. and Carnival Corp. & plc.
Stock Price Performance
Technical indicators suggest continued strong performance for RCL. The stock trades above its 50-day moving averages, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in RCL's financial health and prospects.
Estimate Revision Favoring the RCL Stock
Reflecting the positive sentiment around RCL, the Zacks Consensus Estimate for earnings per share has seen upward revisions. In the past 60 days, analysts have raised their estimates for 2024 and 2025 by 3.9% to $11.59 and 3.8% to $13.38, respectively.
The stock's compelling discounted valuation and strong upward price momentum, bullish technical signals and upward estimate revisions highlight its continued appeal to investors.
Factors Driving RCL Stock
The company is benefiting from robust booking. Since the beginning of 2024, Royal Caribbean has been witnessing solid booking volumes across all key itineraries, with a rise in consumer spending onboard and pre-cruise purchases.
The Caribbean continues to show exceptional strength in bookings, supported by significantly higher pricing. Europe, contributing 15% to total capacity and 28% in the third quarter, is also at record booking levels with elevated pricing. Alaska, which accounts for 6% of capacity and 14% in the third quarter, is performing well thanks to increased capacity and newer ships, with stronger-than-expected pricing in Europe and Alaska driving yield growth. Royal Caribbean resumed operations in China during the quarter with the Spectrum of the Seas.
Consumers are increasingly prioritizing spending on experiences, with a strong focus on travel. They now have 10% more vacation days compared to 2019 and are using half of that additional time to travel. The company's research indicates that travel has become the top leisure spending category and consumers plan to further increase their travel budgets over the next year.
The company's flexible sourcing model, combined with the global appeal of its brand and its leadership in various market segments, enables it to capture high-quality demand effectively. The approach attracts new and younger consumers, contributing to strong yield performance. As of June 30, 2024, RCL had $6.2 billion in customer deposits compared with $6 billion as of March 31, 2024.
The company focuses on new innovative ships and onboard experiences to differentiate its offering and deliver superior yields and margins. Recently, it launched Silver Ray, which redefines the ultra-luxury cruise segment and attracts a younger audience. The Utopia of the Seas was also introduced to attract younger travelers and cater to short-term cruises. Upcoming expansions include Celebrity Cruises' Celebrity Excel, set to launch in late 2025 and Royal Caribbean's Star of the Seas, debuting in mid-2025. The third Icon class ship is planned for 2026 and the seventh Oasis-class ship is scheduled for 2028.
Conclusion
Royal Caribbean presents a compelling investment case with its stock trading at a discounted valuation. RCL's impressive stock price performance over the past year underscores its robust market performance. Key drivers include strong bookings across key regions like the Caribbean and Europe, elevated pricing and innovative fleet expansions targeting younger consumers. Bullish technical indicators, upward earnings revisions and increased consumer spending on travel further support RCL's growth prospects, making the Zacks Rank #2 (Buy) stock appealing for continued investor interest.
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Axis Capital and Aviat Networks have been highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – September 24, 2024 – Zacks Equity Research shares Axis Capital Holdings' (AXS - Free Report) as the Bull of the Day and Aviat Networks (AVNW - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Royal Caribbean Cruises Ltd.'s (RCL - Free Report) , Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and Carnival Corp. & plc (CCL - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Axis Capital Holdings' stock stands out among the Zacks Insurance-Property and Casualty Industry which is currently in the top 8% of over 250 Zacks industries.
Providing a broad range of specialty insurance and reinsurance services, Axis Capital has a global reach through its operating subsidiaries that extend to markets in the US, Bermuda, Europe, Singapore, Canada, Latin America, and the Middle East.
Added to the Zacks Rank #1 (Strong Buy) list this week, AXS lands the Bull of the Day and checks an overall "A" VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum.
AXS Performance Overview
Demand for insurance-related services has remained resilient despite broader inflationary concerns. Because of the essentiality of insurance, conglomerates such as Axis Capital have continued to expand and can also reward shareholders with generous dividends.
To that point, when including dividends, AXS has a total return of +90% over the last three years which has impressively topped the broader indexes and its industry's return of +50%.
Year to date, AXS has soared over +40% to top the Zacks Insurance-Property and Casualty Market's +28%. This has also topped the +20% gains of the S&P 500 and Nasdaq this year.
Attractive Growth Trajectory
Having a steady revenue stream, Axis Capital's total sales are now expected to be up 7% in fiscal 2024 and are projected to rise another 10% in FY25 to $6.73 billion. Furthermore, FY25 sales projections would represent 30% growth since the pandemic with 2019 sales at $5.17 billion.
On the bottom line, Axis Capital is expecting 8% EPS growth in FY24 and FY25. More astonishing, is that FY25 EPS projections of $11.64 would be a 362% increase from pre-pandemic earnings of $2.52 per share in 2019.
Enticing Valuation & Dividend
Despite a very impressive YTD rally, AXS still trades at just 7.2X forward earnings which is well below the benchmark S&P 500's 24.1X.
Even better, Axis Capital's stock is trading at a nice discount to its industry average of 13.6X forward earnings with some noteworthy peers being The Progressive Corporation PGR and ProAssurance Corporation PRA.
Adding more value to AXS is that Axis Capital's 2.24% annual dividend yield impressively tops the benchmarks' 1.24% average and its industry average of 0.16%.
Axis Capital's 16% payout ratio and increased probability also indicates there is plenty of room for the insurance giant to raise its dividend in the future.
Bottom Line
Earnings estimate revisions have remained higher for Axis Capital's FY24 and FY25, making now an ideal time to buy AXS considering the company's expansive growth trajectory. This also magnifies Axis Capital's appealing P/E valuation and alludes to the notion that the strong price performance of AXS should continue.
Bear of the Day:
Among the tech sector, one stock that could surprise investors in terms of more downside risk is Aviat Networks. While Aviat's growth and valuation may be attractive on the surface, the global supplier of wireless network solutions has been entrenched in scrutiny.
Considering such, it may be best to avoid Aviat's stock at the moment which lands a Zacks Rank #5 (Strong Sell) and the Bear of the Day.
Aviat is Losing Investor Confidence
Investor confidence in Aviat's stock has started to sour following legal investigations by multiple law firms. Earlier in the month, Aviat stated it wouldn't be able to timely file its annual report after identifying certain errors impacting previously reported financial information for its current fiscal 2024 and FY23.
News of such has caused Aviat's stock to plummet -17% in September. Furthermore, AVNW is now down more than -30% year to date to vastly underperform the broader indexes and its Zacks Wireless Equipment Market's +25%.
Negative Zacks ESP
On top of mounting concerns in regard to accounting practices, the Zacks ESP (Expected Surprise Prediction) also indicates Aviat could miss its fiscal fourth quarter earnings expectations with the company scheduled to report on Wednesday, September 25.
To that point, the Most Accurate Estimate for Aviat's Q4 EPS is at $0.62 and -6% below the Zacks Consensus of $0.66 per share.
Declining EPS Revisions
Notably, Aviat's Q4 earnings estimate revisions have declined -16% from estimates of $0.79 per share 30 days ago. In the last month annual earnings estimates for FY24 and FY25 have declined -4% and -7% respectively.
Final Thoughts
Unfortunately, the old saying of when there is smoke there's fire may apply to Aviat's stock. Considering the wireless network provider is dealing with financial accounting probes, declining earnings estimate revisions is another tell-tale sign that it may be best to avoid Aviat's stock at the moment.
Additional content:
Is Royal Caribbean Stock a Buy, Sell or Hold Right Now?
Royal Caribbean Cruises Ltd.'s stock is trading at a discount compared with the Zacks Leisure and Recreation Servicesindustry. With a forward 12-month Price/Earnings ratio of 13.5x, it sits below the industry average of 16.88x and the Consumer Discretionary sector's 17.6x.
The stock's performance has been stellar, soaring 91.3% in the past year. The metric outpaced the industry's 21.3% rise and the S&P 500's 31.1% appreciation. During the same period, the Consumer Discretionary sector advanced just 15.2%. RCL has outperformed some other industry players, comprising Norwegian Cruise Line Holdings Ltd. and Carnival Corp. & plc.
Stock Price Performance
Technical indicators suggest continued strong performance for RCL. The stock trades above its 50-day moving averages, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in RCL's financial health and prospects.
Estimate Revision Favoring the RCL Stock
Reflecting the positive sentiment around RCL, the Zacks Consensus Estimate for earnings per share has seen upward revisions. In the past 60 days, analysts have raised their estimates for 2024 and 2025 by 3.9% to $11.59 and 3.8% to $13.38, respectively.
The stock's compelling discounted valuation and strong upward price momentum, bullish technical signals and upward estimate revisions highlight its continued appeal to investors.
Factors Driving RCL Stock
The company is benefiting from robust booking. Since the beginning of 2024, Royal Caribbean has been witnessing solid booking volumes across all key itineraries, with a rise in consumer spending onboard and pre-cruise purchases.
The Caribbean continues to show exceptional strength in bookings, supported by significantly higher pricing. Europe, contributing 15% to total capacity and 28% in the third quarter, is also at record booking levels with elevated pricing. Alaska, which accounts for 6% of capacity and 14% in the third quarter, is performing well thanks to increased capacity and newer ships, with stronger-than-expected pricing in Europe and Alaska driving yield growth. Royal Caribbean resumed operations in China during the quarter with the Spectrum of the Seas.
Consumers are increasingly prioritizing spending on experiences, with a strong focus on travel. They now have 10% more vacation days compared to 2019 and are using half of that additional time to travel. The company's research indicates that travel has become the top leisure spending category and consumers plan to further increase their travel budgets over the next year.
The company's flexible sourcing model, combined with the global appeal of its brand and its leadership in various market segments, enables it to capture high-quality demand effectively. The approach attracts new and younger consumers, contributing to strong yield performance. As of June 30, 2024, RCL had $6.2 billion in customer deposits compared with $6 billion as of March 31, 2024.
The company focuses on new innovative ships and onboard experiences to differentiate its offering and deliver superior yields and margins. Recently, it launched Silver Ray, which redefines the ultra-luxury cruise segment and attracts a younger audience. The Utopia of the Seas was also introduced to attract younger travelers and cater to short-term cruises. Upcoming expansions include Celebrity Cruises' Celebrity Excel, set to launch in late 2025 and Royal Caribbean's Star of the Seas, debuting in mid-2025. The third Icon class ship is planned for 2026 and the seventh Oasis-class ship is scheduled for 2028.
Conclusion
Royal Caribbean presents a compelling investment case with its stock trading at a discounted valuation. RCL's impressive stock price performance over the past year underscores its robust market performance. Key drivers include strong bookings across key regions like the Caribbean and Europe, elevated pricing and innovative fleet expansions targeting younger consumers. Bullish technical indicators, upward earnings revisions and increased consumer spending on travel further support RCL's growth prospects, making the Zacks Rank #2 (Buy) stock appealing for continued investor interest.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.