Axis Capital (AXS) Stock Forecast & Price Target

Axis Capital Holdings has demonstrated considerable financial strength through a notable improvement in its return on equity (ROE), which has reached the mid-teens, contributing to a re-rating of its shares towards a higher multiple. The company has successfully repositioned its business, resulting in high-single-digit growth in gross written premium (GWP) in 2024, marking a recovery after two years of declines. Additionally, the strategic decision to take a larger reserve charge and adopt a conservative underwriting approach positions Axis favorably as it enters a potentially softening market cycle, enhancing its overall stability and prospects for future growth.

Axis Capital Holdings Ltd faces a negative outlook due to a significant reduction in single zone probable maximum losses (PMLs), which have dropped to approximately $200 million in a 1-in-250-year scenario and $160 million for a 1-in-100 scenario, reflecting substantial declines from previous metrics of around $1.5 billion and over $1 billion in 2018, respectively. Additionally, the company anticipates a slowdown in earnings growth for 2026 and 2027, driven by flattening investment yields and limited asset growth as capital return strategies are intensified. The Reinsurance segment's gross written premiums are projected to decline by double digits, particularly in casualty and professional liability sectors, compounded by unfavorable comparisons in underwriting margins following a mild hurricane season in 2025.