AXS Stock Trading at a Discount to Industry at 1.31X: Time to Buy?

AXIS Capital Holdings Limited AXS shares are trading at a discount compared with the Zacks Property and Casualty Insurance industry. Its forward price-to-book value of 1.31X is lower than the industry average of 1.37X, the Finance sector’s 3.94X, and the Zacks S&P 500 Composite’s 7.46X. Also, it has a Value Score of B, reflecting an attractive valuation of the stock.

Shares of other insurers like Arch Capital Group Ltd. ACGL and Kinsale Capital Group, Inc. KNSL are trading at a multiple higher than the industry average, while Selective Insurance Group, Inc SIGI is trading at a discount.

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The insurer has a market capitalization of $7.62 billion. The average volume of shares traded in the last three months was 0.6 million.

AXS Price Performance

Shares of AXIS Capital have lost 1.3% in the past year compared with the industry’s decline of 12.1%.

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AXS’ Encouraging Growth Projection

The Zacks Consensus Estimate for AXIS Capital’s 2026 earnings per share indicates a year-over-year increase of 2.9%. The consensus estimate for revenues is pegged at $6.99 billion, implying a year-over-year improvement of 7.5%. The consensus estimate for 2027 earnings per share and revenues indicates an increase of 8.5% and 8.1%, respectively, from the corresponding 2026 estimates.
Earnings have grown 46.1% in the past five years, better than the industry average of 22.5%.

Optimist Analyst Sentiment on AXS

Two of the four analysts covering the stock have raised estimates for 2026 and 2027 over the past 30 days. Thus, the Zacks Consensus Estimate for 2026 and 2027 earnings has moved up 1.3% and 1.2%, respectively, in the past 30 days.

Average Target Price for AXS Suggests Upside

Based on short-term price targets offered by 11 analysts, the Zacks average price target is $123.64 per share. The average suggests a potential 25% upside from the last closing price.

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AXIS Capital’s Higher Return on Capital

Return on equity in the trailing 12 months was 18.7%, better than the industry average of 7.3%. This highlights the company’s efficiency in utilizing shareholders’ funds.

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 and 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 1.7%, way above the industry average of 0.2%. The insurer boasts one of the highest dividend yields among its peers.

End Notes

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

Coupled with the impressive dividend history, solid growth projections, and optimistic analyst sentiment, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

Selective Insurance Group, Inc. (SIGI): Free Stock Analysis Report

Arch Capital Group Ltd. (ACGL): Free Stock Analysis Report

Kinsale Capital Group, Inc. (KNSL): Free Stock Analysis Report

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

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