AXAHY - With XL Losses Finally Probably Fenced In AXA Looks Undervalued
- The XL Group acquisition has caused years of problems for AXA management, as poor underwriting decisions in long-tail business have led to larger payouts and negative reserve developments.
- An ADC for XL should take the lion's share of future negative development risk off the table.
- Europe, France in particular, is still core to the business and will be for a long time, but it's time for AXA to focus on growing its Asian operations.
- Long-term core earnings growth of 3% to 4% can support a long-term double-digit total annualized return for AXA shares at today's price.
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With XL Losses Finally, Probably, Fenced In, AXA Looks Undervalued