Janney Sees Near-Term Catalysts Lacking For AXIS Capital, Downgrades

In the absence of an aggressive capital management program, Janney Montgomery Scott’s Ryan Byrnes believes that there might not be any other near term catalyst for Axis Capital Holdings Limited AXS shares, apart from book value growth.

Byrnes downgraded the rating on the company from Buy to Neutral.

Near Term Catalysts Missing

The analyst expressed surprise that Axis Capital “has not been more aggressive in repurchasing stock,” following the failure of the Partnerre Ltd PRE deal.

Byrnes pointed out that Axis Capital continued to have “modest operating leverage,” although the company is still de-risking its portfolio by “shrinking property catastrophe reinsurance and replacing it with low volatility accident and health business.”

The analyst pointed out that management appears to intend to continue with its de-risking strategy, while keeping an eye on M&A marketing, looking for bolt-on deals for the insurance business.

“Lacking significant near-term catalysts, we expect AXS to continue to trade in line with peers and thus we view shares as being fairly valued,” the analyst added.