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Price: $51.01
Discount category: Close to intrinsic value
Intrinsic value source: AI estimate
Next earnings: 2027-02-25
Next earnings is estimate: No
Company name: AXA
Sector: Insurance
About: AXA is a French insurance group. It sells property and casualty insurance to people and companies, life and savings products, and health and protection insurance. AXA XL is its unit for large commercial risks and reinsurance. Its main markets are France, the rest of Europe, the United States through AXA XL, and Asia, including Japan and Hong Kong. Gross written premiums and other revenues were Euro 93.0 billion in the first nine months of 2026, with Euro 48.1 billion from property and casualty and Euro 44.8 billion from life and health. AXA sold its asset manager, AXA Investment Managers, to BNP Paribas on July 1, 2025. Its shares trade on Euronext Paris, and its ADSs trade over the counter in the United States. Each ADS represents one ordinary share.
Thesis: The market prices AXA as a mature European insurer with slow growth, and below the AI estimate. Investors fear three things. Prices for large commercial risks and reinsurance are falling: in the first nine months of 2026, AXA XL Insurance premiums fell 1% and AXA XL Reinsurance premiums fell 9%. Natural catastrophe losses in Europe were above the normal level in the third quarter of 2026. Market moves can lower the Solvency II ratio, which fell to 213% at September 30, 2026 from 218% at June 30. For the gap to close, three things must be true. Underlying earnings must reach about Euro 8.6 billion for 2026, with underlying EPS growth at the top of the 6% to 8% range, as AXA expects. The first year of the new plan, Growing Forward, must show underlying EPS growth of 7% to 9% and an underlying return on equity of 15% to 17%. AXA must keep its total payout of 75% of underlying earnings, with dividends and buybacks. The full-year 2026 results on February 25, 2027 give the next test, and the first-quarter 2027 activity indicators on May 4, 2027 give the one after it. If these checks pass, the gap can close within one to two years. The main reason it may not close is a soft commercial insurance market that lowers growth at AXA XL for several years.
Valuation: The intrinsic value for AXA is an AI estimate from November 9, 2026. It is not an analyst's value. An AI research agent calculated it from AXA's releases. The method is a multiple of underlying earnings per share for 2027. The full-year 2025 release (February 26, 2026) gives underlying EPS of Euro 3.86. The first-half 2026 release (July 31, 2026) gives underlying EPS of Euro 2.19, up 8%, an underlying return on equity of 18.3% and shareholders' equity of Euro 44.7 billion at June 30, 2026. The nine-month 2026 release (October 29, 2026) gives the outlook of underlying earnings of about Euro 8.6 billion for 2026, with underlying EPS growth at the top of the 6% to 8% range. The estimate assumes 2026 underlying EPS of Euro 4.17, which is Euro 3.86 plus 8%. The plan release of September 15, 2026 gives the 2027 to 2029 targets of 7% to 9% underlying EPS growth a year and a payout ratio of 75%. AXA's 2008 annual report on Form 20-F says that each ADS represents one ordinary share. The prices of November 6, 2026 agree with this ratio. The estimate uses an exchange rate of $1.1196 per euro, the market rate on November 9, 2026, as an assumption. The 2027 EPS and the multiples in each case are assumptions. The low case assumes 2027 underlying EPS of Euro 4.30, growth of about 3%, at 9.5 times. Catastrophe losses and a soft market hold growth back in this case. It gives Euro 40.85 and $45.74 per ADS. The base case assumes Euro 4.50, growth of about 8%, at 11 times. It gives Euro 49.50 and $55.42 per ADS. The high case assumes Euro 4.60, growth of about 10%, at 12.5 times. It gives Euro 57.50 and $64.38 per ADS. The estimate assumes weights of 25%, 50% and 25%. The weighted intrinsic value is $55.24 per ADS. The value moves with the euro. Scale and switching costs are the main sources of the advantage. AXA is one of the largest insurers in Europe, and its agent networks, brand and long-term life and health contracts keep many customers for years. Underlying return on equity of 18.3% at June 30, 2026 is above the cost of equity. But property and casualty insurance is a competitive market with prices that move in cycles, and AXA XL earned weak returns in some past years. The estimate expects the advantage to last 10 years or more, but not 20 years. As of 2026-11-09.
Risks: Prices for large commercial risks and reinsurance are falling. AXA XL Reinsurance premiums fell 9% and AXA XL Insurance pricing fell 1% in the first nine months of 2026. A long soft market can lower growth and margins at AXA XL. Natural catastrophes can cause large losses. Losses from storms and other weather events in France, Switzerland and Italy were above the normal level in the third quarter of 2026. Interest rates, credit spreads and equity markets change the value of AXA's investments and its Solvency II ratio. Market moves lowered the ratio by 5 points in the third quarter of 2026. AXA earns mostly in euros, and the ADS trades in U.S. dollars. A weaker euro lowers the value of each ADS.
Balance sheet: AXA is an insurer, so its balance sheet is mostly investments that back insurance and savings contracts. Shareholders' equity was Euro 44.7 billion at June 30, 2026, down Euro 2.5 billion from December 31, 2025. Debt gearing was 21.7% at June 30, 2026, within the plan range of 19% to 23%. The Solvency II ratio was 213% at September 30, 2026, down from 218% at June 30, 2026 and 224% at December 31, 2025. In May 2026, AXA placed Euro 750 million of Tier 2 notes. In 2026 it completed an annual share buyback of Euro 1.25 billion, and the dividend for 2025 was Euro 2.32 per share. As of 2026-06-30.
Checkpoints: Oct 29, 2026: Nine-month 2026 activity indicators. Passed. Watch: Revenue growth of about 5% and a confirmed 2026 outlook pass; a lower outlook or a large fall in the Solvency II ratio fail. Outcome: Revenues rose 5% to Euro 93.0 billion and AXA confirmed its 2026 outlook, although the Solvency II ratio fell 5 points to 213%. Feb 25, 2027: Full-year 2026 results. Pending. Watch: Underlying earnings near Euro 8.6 billion, underlying EPS growth near 8% and a dividend in line with the 75% payout pass; lower earnings or a smaller payout fail. May 4, 2027: First-quarter 2027 activity indicators: first months of the new plan. Pending. Watch: Revenue growth with stable AXA XL margins and a Solvency II ratio above 200% pass; falling revenue at AXA XL or a lower ratio fail.
Recent events: 2026-10-29: AXA reported activity indicators for the first nine months of 2026. Gross written premiums and other revenues rose 5% on a comparable basis to Euro 93.0 billion. Property and casualty premiums rose 3% and life and health premiums rose 7%. The Solvency II ratio fell 5 points to 213% because of market moves. AXA confirmed that it expects underlying earnings of about Euro 8.6 billion for 2026, with underlying EPS growth and underlying return on equity at the top of the plan ranges. 2026-09-15: AXA presented its 2027 to 2029 plan, Growing Forward. It targets underlying EPS growth of 7% to 9% a year from 2026 to 2029, an underlying return on equity of 15% to 17%, about Euro 25 billion of cash upstream to the holding company and a total payout ratio of 75% of underlying earnings. 2026-07-31: AXA reported first-half 2026 results. Underlying earnings rose 4% at constant exchange rates to Euro 4.5 billion, or 9% without AXA Investment Managers, and underlying EPS rose 8% to Euro 2.19. Net income rose to Euro 4.2 billion. Underlying return on equity was 18.3%, and the Solvency II ratio was 218%. 2026-05-27: AXA announced the placement of Euro 750 million of Tier 2 notes. 2026-05-05: AXA reported first-quarter 2026 activity indicators. Gross written premiums and other revenues rose 6% to Euro 38.0 billion, and the Solvency II ratio was 211% at March 31, 2026. 2026-02-26: AXA reported full-year 2025 results. Underlying earnings rose 6% to Euro 8.4 billion, and underlying EPS rose 8% to Euro 3.86. AXA proposed a dividend of Euro 2.32 per share and an annual share buyback of up to Euro 1.25 billion. It had completed a Euro 3.8 billion buyback linked to the sale of AXA Investment Managers on January 20, 2026.