Wunderlich Securities downgraded its earnings per share estimates on Axis Capital Holdings AXS in a research report published today, following bad Q1 results. Axis Capital reported a Q1 loss of $414 million or $3.65 per share, compared to last year's profit of $96 million or $0.67.
As a results, Wunderlich now predicts earnings per share will be only $0.31 this year, down from the previous estimate of $0.66. For the next year, Axis Capital is expected to report earnings of $5.15 per share, while the previous estimate was $5.35.
In the report, Wunderlich decided to put a Buy rating on Axis Capital's shares, however, with the price target set at $45. Wunderlich believes Q1 problems are due to Japan earthquake and tsunami disaster, but that the company's underlying foundation remains solid. In the report, Wunderlich states, "In our opinion, AXS possesses one of the best product mixes to take advantage of the hardening market."
Wunderlich's positive outlook on Axis Capital's future is summed in the report with: "We believe the rise in pricing should lead to increased profitability and valuation expansion for AXS over the next 12 months. We rate AXS shares Buy with a $45 price target."
On Friday, Axis Capital's shares lost 1.7% of their value to close the week at $35.36.
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Posted In: Analyst ColorInitiationAnalyst RatingsAXIS Capital HoldingsFinancialsProperty & Casualty InsuranceWunderlich Securities
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