How are energy investors positioned?
On Tuesday, TD Cowen analyst Andrew Kligerman maintained a Buy rating on AXIS Capital shares, with a steady price target of $127.00. According to InvestingPro data, the stock currently trades at $98.29, near its 52-week high of $98.26, with analysts’ consensus indicating a moderately bullish outlook. The optimism from TD Cowen comes after a series of meetings with AXIS Capital’s top executives, including CEO Vince Tizzio, CFO Peter Vogt, and CEO of Reinsurance Ann Haugh. During these discussions, the executives conveyed a strong outlook for the company’s future, particularly for the year 2025.
The management team at AXIS Capital expressed confidence in the company’s underwriting capabilities, which are enhanced by a strategic focus on the Insurance sector, effective limit management, and a centralized Chief Underwriting Officer (CUO) approach. The company’s reserve strength was also highlighted, with the Enstar Loss Portfolio Transfer (LPT) moving the balance sheet composition closer to premiums, which is seen as a positive development. InvestingPro data supports this optimistic outlook, showing AXIS Capital maintains a "GREAT" overall financial health score of 3.04, with particularly strong metrics in profit and price momentum.
Kligerman noted that AXIS Capital’s valuation is particularly attractive when compared to its peers. Currently trading at 7.9 times its estimated 2026 earnings per share (EPS), AXIS Capital is undervalued relative to specialty insurance peers, which trade at 19.6 times EPS, and reinsurers, which trade at 6.1 times EPS. This valuation assessment aligns with InvestingPro’s Fair Value analysis, which indicates the stock is currently undervalued. The company has demonstrated strong fundamentals with a 56.7% return over the past year and has maintained dividend payments for 23 consecutive years. Based on this analysis, Kligerman believes there is a 30% upside potential for the stock.
The price target of $127 set by TD Cowen is based on a sum-of-parts analysis, which takes into account the various segments of AXIS Capital’s business. According to the firm’s estimates, approximately three-quarters of AXIS Capital’s expected earnings for 2026 will be generated from its Insurance segment, which is predominantly focused on specialty insurance. This segment’s strong performance is a key factor in the company’s favorable valuation and the analyst’s positive outlook. For deeper insights into AXIS Capital’s valuation and performance metrics, including 10+ additional ProTips and comprehensive financial analysis, explore the full research report available on InvestingPro.
In other recent news, AXIS Capital Holdings Ltd reported a stronger-than-expected earnings per share (EPS) of $2.97 for the fourth quarter of 2024, surpassing analysts’ projections of $2.57. However, the company’s revenue did not meet expectations, totaling $1.47 billion compared to the anticipated $1.52 billion. AXIS Capital also announced a new $400 million share repurchase program, replacing a previously utilized $300 million initiative. This move aligns with the company’s capital management strategy and reflects its commitment to shareholder value. Additionally, AXIS Capital executed a $200 million stock buyback from T-VIII PubOpps LP, reducing Stone Point Capital’s stake in the company from 5.6% to around 3%. Analyst firm Keefe, Bruyette & Woods raised its price target for AXIS Capital to $118, maintaining an Outperform rating, following a review of the company’s reserve development. The analyst’s confidence is supported by AXIS Capital’s reserve releases and share repurchases, which led to an increase in EPS estimates for 2025 and 2026. These developments underscore AXIS Capital’s strategic focus on capital allocation and financial strength.
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