Shares of AXIS Capital Holdings Limited AXS closed at $100.54 on Monday, near its 52-week high of $102.36. 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 $95.71 and $86.81, 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 18.9%. AXS has a solid surprise history. The insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.89%.

AXS Price Movement vs. 50-Day Moving AverageZacks Investment Research

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The insurer has a market capitalization of $7.90 billion. The average volume of shares traded in the last three months was 0.7 million.

AXS is an Outperformer

Shares of AXIS Capital have gained 42.7% in the past year, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 23.4%, 15.1% and 7.7%, respectively.

AXS Outperform Industry, Sector and S&P 500 in 1 YearZacks Investment Research

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AXIS Capital’s Growth Projection Encourages

The Zacks Consensus Estimate for AXIS Capital’s 2025 earnings per share indicates a year-over-year increase of 3.1%. The consensus estimate for revenues is pegged at $6.66 billion, implying a year-over-year improvement of 9.2%. 

The consensus estimate for 2026 earnings per share and revenues indicates an increase of 8.8% and 7%, respectively, from the corresponding 2025 estimates.

Optimistic Analyst Sentiment on AXS

Each of the four analysts covering the stock has raised estimates for 2025 and two analysts have raised the same for 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 moved 2.5% and 0.8% north, respectively, in the last 30 days.

AXIS Capital’s Favorable Return on Capital

Return on equity in the trailing 12 months was 19%, better than the industry average of 7.7%. 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 11.7%, better than the industry average of 5.9%.

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.

Story Continues

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 1.75%, 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 1.48, lower than the industry average of 1.52.

Its pricing, at a discount to the industry average, gives a better entry point to investors. Also, it has a Value Score of A.Zacks Investment Research

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Other property and casualty insurers, such as Arch Capital Group Ltd. ACGL, The Travelers Companies, Inc. TRV and Cincinnati Financial Corporation CINF, are trading at a premium to the industry.

Conclusion

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. 

Axis Capital has a VGM Score of B, which indicates a potential upside and instills confidence. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results have shown that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer better returns.

Coupled with the impressive dividend history, solid growth projections as well as attractive valuations, the time appears right for potential investors to bet on this Zacks Rank #2  insurer. You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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