Axis Capital (AXS) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trconclude in earnings estimates — one of the most powerful forces impacting stock prices.
A company’s altering earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate — the consensus measure of EPS estimates from the sell-side analysts covering the stock — for the current and following years.
Individual investors often find it hard to build decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy becaapply of the power of a altering earnings picture in determining near-term stock price shiftments.
As such, the Zacks rating upgrade for Axis Capital is essentially a positive comment on its earnings outview that could have a favorable impact on its stock price.
Most Powerful Force Impacting Stock Prices
The modify in a company’s future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price shiftment of its stock. That’s partly becaapply of the influence of institutional investors that apply earnings and earnings estimates for calculating the fair value of a company’s shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically acquire or sell it. Their bulk investment action then leads to price shiftment for the stock.
Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Axis Capital imply an improvement in the company’s underlying business. Investors should reveal their appreciation for this improving business trconclude by pushing the stock higher.
Harnessing the Power of Earnings Estimate Revisions
Empirical research reveals a strong correlation between trconcludes in earnings estimate revisions and near-term stock shiftments, so it could be truly rewarding if such revisions are tracked for creating an investment decision. Here is where the attempted-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which applys four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here >>>> .
Earnings Estimate Revisions for Axis Capital
For the fiscal year concludeing December 2025, this insurance company is expected to earn $11.95 per share, which is unmodifyd compared with the year-ago reported number.
Analysts have been steadily raising their estimates for Axis Capital. Over the past three months, the Zacks Consensus Estimate for the company has increased 3.4%.
Bottom Line
Unlike the overly optimistic Wall Street analysts whose rating systems tconclude to be weighted toward favorable recommconcludeations, the Zacks rating system maintains an equal proportion of “acquire” and “sell” ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks obtain a “Strong Buy” rating and the next 15% obtain a “Buy” rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, creating it a solid candidate for producing market-beating returns in the near term.
You can learn more about the Zacks Rank here >>>
The upgrade of Axis Capital to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might shift higher in the near term.
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Axis Capital Holdings Limited (AXS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Source Zacks-com
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