Analysis of AXA share price

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Among the companies whose share prices are quoted on the stock markets, particularly those on the French markets, we notice many large financial groups whose activities touch the banking or insurance sectors. Thus, one of the most popular actions with traders and retail investors is that of the AXA group, which is known for its high liquidity and its ability to innovate. Here therefore is some basic information about this company and advice for the analysis of its share price.  

Latest news

AXA: clarification of the consequences of the coronavirus on underlying earnings

05/06/2020 - 10h49

This Wednesday, June 3, 2020, the news requires a visit to the insurer AXA in order to understand certain details. Indeed, AXA has quantified the consequences of the Covid-19 pandemic on its underlying earnings.

Elements that can influence the price of this asset:

Analysis N°1

As part of this analysis, the insurance industry, and more specifically the life insurance segment that generates a large portion of this group's revenues, will need to be closely monitored.

Analysis N°2

Similarly, AXA's positioning in emerging markets and all operations carried out by the group to increase its presence in these markets will be closely monitored.

Analysis N°3

The digital sector and online sales are also an important means for AXA to increase its sales. Indeed, it will be necessary to closely monitor the development of new online services by the group.

Analysis N°4

The economic situation in the countries in which the AXA Group operates will of course also have an undeniable influence on this value and you should therefore monitor this data.

Analysis N°5

Of course, like all insurance companies, the AXA Group could see its profitability threatened by an increase in claims and damages. Attention will therefore be paid to these statistics.

Analysis N°6

Finally, it will of course be necessary to take into account the increasingly strong competition from this sector of activity throughout the world and therefore the current events of its main adversaries.

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About the AXA Company:

Particularly well known in France, the AXA Group is in fact the European leader in the insurance sector and its turnover is generated by diverse and multiple activities that include life insurance, general insurance cover, asset management, international insurance and banking.

This group has extended its activities in different European countries but achieves the majority of its profits in France.


Some key figures to understand better the importance of AXA:

To understand the presence and importance of AXA around the world, here are some important figures you should know.

In 2017, AXA had no less than 107 million customers around the world and only 9 million in France. This clearly demonstrates the strong presence of the French insurer on the international market.

In the labor market, AXA is also a key player, since the group currently employs around 120,000 people in different countries and has with more than 166,000 employees worldwide.

Finally, let's take a look at the profitability of AXA. In 2016, the group generated a turnover of more than 100 billion euros with a net profit of more than 5.6 billion euros.

Of course, these few figures are given to you as an indication and represent the situation as it is in 2017. They are therefore likely to change over time.


The major competitors of Axa:

Knowing about the major competitors of the Axa Group will enable you to better understand the challenges of the insurance activity sector. In fact, by observing the financial results and following the news and events of these competitors you will be able to better anticipate their influence on the Axa Company and thereby adapt your stock market trading strategy accordingly to easily make significant profits.

Competitors of the Axa Group on the international level are numerous. Among these can be noted the Allianz Group which holds second position worldwide in this sector and sixth position in France. This competitor offers overall a similar operation as the Axa Group with comparable products and services and has developed a strong international presence, even beyond Europe.

Another major competitor of the Axa Group is Assicurazioni Generali, originally from Italy, which is currently the market leader in its country and holds third position on a European level. Its shares can be found on the stock market under its more common name of Generali. Generali also offers insurance for individuals and professionals.

In France, the Axa Group faces a serious competitor by the name of Groupama (Groupe des Assurances Mutuelles Agricoles) that also offers banking and savings services and which holds the number two position on a national level in the insurance sector. Axa also faces competition from MMA (Mutuelles du Mans Assurances) which is specialised in insurance for associations and groups as well as individuals and professionals.


The major partners of Axa:

Concerning partnerships of the Axa Company, we need to look to the start-ups that are central to the collaborative strategy of this insurance company. For example, Axa recently collaborated with Blablacar and Deliveroo to offer its services to young innovative businesses.

At present Axa does not have any partnerships with other large companies quoted on the stock markets.


Analysis of the AXA share price:

For many years, the AXA share price has been moving up and down in successive and liquid trends. This is the reason why many investors are interested in this stock.


Important stock market information about Axa shares:

In order to best assist you in understanding the stock market challenges of Axa shares we have given you some essential and pertinent information such as its historical technical growth and some key dates of its financial and economical history. But it is also important to know some more general information such as the following:

All this information is important to enable a good understanding of the challenges inherent in trading in Axa shares and can be used to analyse this stock.


Economical and financial history of the AXA Company:

To understand the events that have influenced the AXA share price you need to dive into the financial and economic history of this French Company. Here then is a summary of the major dates that have marked this group’s history since the beginning of the 21st Century.


Analysis of the strengths and weaknessesof AXA shares:

Before you start trading on the price of AXA’s shares, you must of course know very good the prospects for the group's economic growth. To do this, we need to learn about the strengths and weaknesses of this company and detect the opportunities to seize as well as the possible eventual threats that could slow down its development. This is what we propose you to discover here in more detail.

As a first step, you should notice that AXA has many strengths among which we can highlight its very strong presence in the international market since AXA operates in no less than 50 different countries. In Europe, AXA remains a leader company in the sector of insurances and it ranks second in terms of market share. The group is also one of the largest companies in the world in the field of asset management, thanks to its assets attached to the life insurance contracts the company offers.

Thanks to its Direct Assurance subsidiary, which offers different types of insurance contracts on the Internet and by telephone, AXA is currently the leader in online sales in this sector.

Finally, we can highlight the financial solidity of this company, which is constantly attracting many investors.

However, AXA does not only have strengths, it also has a few weaknesses which are also important to know. Thus, we could list the group’s lack of diversification of its activities which remain relatively focused on life insurance, savings and retirement. Even if its international presence is an undeniable strong point, it is also regrettable that its expansion is mainly concentrated on the European territory and little in the rest of the world. In addition, AXA is highly dependent on price increases of damage insurance, which could be detrimental to the profitability of this activity, which is one of the company's main activities. The group also faces increasing competition in the Italian and Spanish markets and is struggling to develop properly.

Finally, it is regrettable that AXA Bank subsidiary has so far only performed relatively poor compared to expectations. This is probably due to a lack of specialization in this area and to a very strong competition from major banking groups and online banks.


Companies owned by AXA and their activities:

To better understand the scope of AXA's activities, we now propose you to find out the companies owned or directly dependent on the group and the activities they carry out.

First, let's take a look at the companies that depend directly on AXA France. We find:


There are also other companies that depend on the AXA group but are not directly linked to AXA France, such as:


What are the possibilities of growth of the company AXA and of its stock market shares?

By analyzing the current situation of the insurance market in France and in Europe as well as the strengths and weaknesses of the AXA group, we can try to anticipate the possibilities of economic growth of this company and thus the evolution of the price of its shares on the stock charts.

AXA could indeed seize some interesting development and growth opportunities in the medium and long term. The life insurance market, which is one of the group's flagship services, is a very healthy market compared to other sectors, which suggests great prospects. The online sales of insurance products is also booming and AXA is already well positioned in this area thanks to its subsidiary Direct Assurance. It could thus gain new market shares. Finally, AXA could steer its strategy towards more targeted international development, notably by taking advantage of the growth prospects of markets in emerging countries such as the Asian countries.

But to succeed in this bet on the future, AXA will have to overcome certain pitfalls and avoid certain threats that could slow down its growth. Thus, the observation built today operates in a rather unfavorable economic situation since the national and European economy struggling to recover since the crisis. In addition, the number of claims and damages to be compensated has increased over the last years and this trend could accelerate further in the future, especially since this specific market for property and casualty insurance is particularly congested. Finally, in general, AXA faces increasing competition from European and international competitors specialized or not in insurance.

All elements must therefore be carefully monitored to help you accurately anticipate AXA's economic and financial developments and trade on its stock market.


The arguments in favour of a rise in the AXA share price:

Of course, one of the most persuasive arguments relating to a probability of a rising trend of the AXA share price concerns its position among the other European and international players in certain specific sectors of its activities. It should be remembered here that the AXA Group currently holds second position in the insurance sector in Europe and is the leader in life insurance worldwide. It is also the global leader in the wealth management sector. This position as leader has been rendered possible through the long term strategy practised by this group over the last three decades which essentially resides on the strategic acquisition of companies around the world. Nowadays this strong position offers the AXA Group a better visibility worldwide than the majority of its competitors and an almost total coverage of the different areas in this sector.

This in fact brings us to another positive argument for the future growth in this share price and relates this time to the distribution of this group’s activities into different sectors. It should be remembered here that the life and retirements savings solutions alone represent nearly 58% of this group’s activities. Then we find the damage insurance policies with 33% of the activities then international insurance and wealth management. The fact that these sectors are so separate and distinct means that AXA offers a better coverage for the market requirements and protects the company from risks related to a single type of product.

Apart from these arguments we should also mention the fact that the financial situation of this company appears particularly solid which strengthens the shareholders and investors feelings of security and encourages them to take buying positions in this company. This financial solidity is largely due to the centralised cash management system of the company which boasted a 191% solvency ratio in September 2016.

The AXA Group has for eight years concentrated its activities and investments in certain countries that have undergone strong growth and emerging countries which are now starting to bear fruit.  Since 2010 AXA has in fact invested no less than 4.2 billion Euros in Asia and has thereby become leader in this sector. This company has also invested 0.7 billion Euros in the Mediterranean, Africa and Latin America as well as 200 million Euros in Eastern Europe. The current increase in growth in these geographical sectors should therefore continue to the benefit of AXA and generate even more revenue.

Another advantageous strategy of AXA relating to its development concerns its continuing responsiveness to the digital world. By using this type of communication and distribution channels the group shows itself to be more in touch with the general modern trend and thereby improves its brand image. In this way it is connected to a larger market and can therefore be more competitive against the competition. Still from a strategic point of view, in order to further improve its profitability and financial results AXA recently decided to concentrate on its unit linked technical products such as health, accidents and retirement that offer more advantageous margins and are less sensitive to variations and drops in the interest rates.

Generally speaking, if we compare the results published by AXA to those of the market in general, we can observe that the group is one of the only companies capable of generating profits, sometimes even record profits, in a negative environment with low true rates or highly volatile markets.

And finally the last argument for a rise in the AXA share price relates to the global confidence of the analysts and ratings agencies relating to this asset. The group benefits from an AA rating from a number of these agencies and the analysts agree with this positive rating which confirms the reliability and strong position of this asset.


The arguments in favour of a drop in the AXA share price:

After reading the factors presented up to now you have no doubt reached the conclusion that the AXA Company is financially solid with an attractive strategy that should enable the company to continue increasing its activities and profits in the future. However stock market investors do not simply content themselves with an analysis of the group’s strengths, they also take into consideration the company’s weak points and the factors in favour of a drop in the company’s share price and this is what we shall now examine in detail.

Firstly, with the highly specific activity sector of the AXA Company we note that the capital structure is strongly sensitive to changes in the financial markets.  This notably concerns the continuation of the weakness in current rates which are highly punishing for AXA’s guaranteed service rates as well as for the retention of life assurance margins and the shocking rise in the interest rates.

We also note a significant structural drop in the profitability of savings schemes for the majority of insurers including the AXA Company.  Concerning the new savings accounts, the profitability and the margins of the insurers are currently operating close to zero which is a real problem over the long term.

The profitability of the AXA Group can also be negatively affected by certain events that incur serious losses. This notably concerns events such as bombings or climate catastrophes including floods that have increased in number over the last few years.

The fact of having to respond to the capital requirements of the GSII regulations presents another serious setback to the development of the AXA Company which at present still manages to satisfy their requirements.

And to conclude, the last argument in favour of a drop in the AXA share price relates to the lack of interest from investors for assets in this particular sector.  In fact, since the financial crisis that severely affected Europe a few years ago, investors have displayed a certain wariness, even distrust regarding financial companies in this geographical area, including those of the insurance sector.

Frequently Asked Questions

In which stock market indices is the AXA share price present?

At this present time the AXA share price appears in the composition of three major stock market indices; the CAC 40, the SBF 120 and the Eurostoxx 50. But it is also to be found in a number of secondary stock market indices as follows: CAC All Shares, CAC All-Tradable, CAC Large 60, Euro Stoxx 50, Euronext 100, Euronext CDP Environment France EW, Euronext CDP Environment France Ex Oil, FTSE Eurotop 100, Low Carbon 100 Europe, PEA, Stoxx Europe 50, and the Stoxx France 50.

How well has the AXA share price performed recently?

Historically we note that the stock market share price of the AXA Group has experienced an overall drop of 15.78% over the last five years. Over the last three years this drop in performance was 19.80%, over the last two years 12.83% and the last year 14.04%. Finally we note that this performance again fell by 9.45% over the first three months of the year 2020.    

What is the risk level of AXA shares over the short and long term?

The evaluated risk level for the AXA shares over the month stood at 39.87%. Over the next three months this risk is estimated to increase to 74.01% before it lowers to 53.79% for a period of six months. It is then predicted to continue its fall to 27.06% over three years. Finally, for the following ten years this risk level is evaluated at 39.27%. This indicates that the risk level is overall fairly low over the long term.

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Trade Axa shares now!
76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.