Shares of AXIS Capital Holdings Limited AXS closed at $94.87 on Tuesday, near its 52-week high of $98.11. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $91.39 and $82.13, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

Earnings of AXIS Capital grew 67.1% in the last five years, better than the industry average of 19.3%. AIZ has a solid surprise history. The insurer has a solid track record of beating earnings estimates in three of the last four quarters while missing in one, the average being 9.17%.

AXS is an Outperformer

Shares of AXIS Capital have gained 48.2% in the past year, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 23.5%, 15.5% and 9.1%, respectively.

AXS Outperforms Industry, Sector, S&P in a Year

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AXS’ Growth Projection Encourages

The Zacks Consensus Estimate for AXIS Capital’s 2025 earnings per share indicates a year-over-year increase of 0.5%. The consensus estimate for revenues is pegged at $6.76 billion, implying a year-over-year improvement of 10.9%.

The consensus estimate for 2026 earnings per share and revenues indicates an increase of 10.4% and 6.3%, respectively, from the corresponding 2024 estimates. 

AXIS Capital’s Favorable Return on Capital

Return on equity in the trailing 12 months was 18.5%, better than the industry average of 8.3%. This highlights the company’s efficiency in utilizing shareholders’ funds.

Also, the return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting AXS’ efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 11.2%, better than the industry average of 6.3%.

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 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 1.86%, way above the industry average of 0.2%. The insurer boasts one of the highest dividend yields among its peers.

AXS Shares are Undervalued 

Axis Capital shares are trading at a price-to-book multiple of 1.43, lower than the industry average of 1.64.
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 The Travelers Companies, Inc. TRV, W.R. Berkley Corporation WRB and Cincinnati Financial Corporation CINF are trading at a multiple higher than the industry average.

Final Take on AXS

This leading specialty insurer and global reinsurer, which aims to lead in specialty risks, has been repositioning its portfolio and strengthening its book of businesses. Focusing on prudently deploying resources while enhancing efficiencies, improving its portfolio mix and underwriting profitability poises Axis Capital for growth.

Its impressive dividend history, solid growth projections as well as attractive valuations are other positives. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report

W.R. Berkley Corporation (WRB) : Free Stock Analysis Report

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Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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