Shares of AXIS Capital Holdings Limited AXS closed at $100.70 on Thursday, near its 52-week high of $110.34. This proximity underscores investor confidence. The stock has the ingredients for further price appreciation.
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The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $100.26 and $98.99, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data
The insurer has a market capitalization of $7.42 billion. The average volume of shares traded in the last three months was 0.6 million. The insurer is trading at a price-to-book multiple of 1.27X, lower than the industry average of 1.38X.
AXS' Price Performance
Shares of AXIS Capital have gained 0.9% in the past year against the industry’s decline of 4.4%. However, the Finance sector and the Zacks S&P 500 Composite have gained 13% and 32.5%, respectively.
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Shares of other insurers like Arch Capital Group Ltd. ACGL and Selective Insurance Group, Inc SIGI ) have gained 4.5% and 4.7%, while Kinsale Capital Group, Inc. KNSL has lost 31.2% in the same time frame.
AXS' Encouraging Growth Projections
The Zacks Consensus Estimate for AXIS Capital’s 2026 earnings per share(EPS) indicates a year-over-year increase of 2.6%. The consensus estimate for revenues is pegged at $7 billion, implying a year-over-year improvement of 7.9%.
The consensus estimate for 2027 EPS and revenues indicates an increase of 8.5% and 8.3%, respectively, from the corresponding 2026 estimates.
Earnings have grown 46.1% in the past five years, better than the industry average of 22.3%. The expected long-term earnings growth is pegged at 2.5%.
Average Target Price for AXS Suggests Upside
Based on short-term price targets offered by 12 analysts, the Zacks average price target is $115.92 per share. The average suggests a potential 15.1% 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 18.1%, better than the industry average of 12.3%. This highlights the company’s efficiency in utilizing shareholders’ funds.
Return on invested capital in the trailing 12 months was 11.5%, better than the industry average of 4.8%, reflecting AXS’ efficiency in utilizing funds to generate income.
Factors Acting in Favor of AXS
AXIS Capital, a global specialty underwriter, has a strategic focus on specialty products, including professional liability, cyber insurance, marine, aviation, political risk and terrorism coverage. The insurer targets higher-margin, less commoditized segments of the insurance market, allowing it to leverage underwriting expertise, maintain pricing discipline and build strong client relationships. AXS sees growth in specialty lines, which are expected to offer strong double-digit ROE opportunities.
The Insurance segment is poised to benefit from a diversified portfolio of global specialty businesses. Both the North American and Canadian insurance markets are benefiting from economic stability, rising demand for coverage amid increasing climate and cyber risks. Expansion of its underwriting and product capabilities along with repositioning, carried out over the past three years, continues to drive the insurance segment’s results.
The Reinsurance business should benefit from strong cycle management, focusing on improving the business mix.
Net investment income has been witnessing improvement over the last few years, as evident from its CAGR of 7.4% over the last nine-year period from 2017 to 2025. Higher income from fixed maturities due to increased portfolio yields, income from cash and cash equivalents, and increased returns on alternative investments should drive net investment income.
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.
AXIS Capital continues to boost shareholder value through stock buybacks and dividend hikes. During the three months ended March 31, 2026, AXS repurchased shares worth for $60 million. AXS had $53 million of remaining authorization under the open-ended board-authorized share repurchase program.
Risks for AXS
AXS experiences losses or gains resulting from fluctuations in the values of non-U.S. currencies. Failing to manage the foreign currency exposures may adversely affect the business’s operating results.
The ongoing global economic uncertainties and evolving market conditions may continue to affect the company’s operating results, financial condition, and capital resources.
End Notes
Growth in specialty insurance and reinsurance, an improving portfolio mix, underwriting profitability, higher investment income and effective capital deployment should pave the way for growth. However, exposure to foreign currency and geopolitical tensions raises concern.
It has hiked its dividend for 18 straight years and currently yields 1.7%, well above the industry average of 0.2%, making the stock an attractive pick for yield-seeking investors.
Coupled with the higher ROC, an impressive dividend history and solid growth projections, it is wise to retain this Zacks Rank #3 (Hold) 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).