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Axa: Oddo revises 2019 earnings estimate

(CercleFinance.com) - Oddo has adjusted its forecasts for insurance group Axa, although has confirmed its Buy rating on the share.

The broker says that it is reducing its earnings estmate for 2019, while AXA XL is expected to report OP that is close to breakeven in H2 2019.

Analysts have adjusted their earnings estimates ahead of their publication, having cut their adjusted EPS forecast by 5.9% in 2019, followed by a 1.4% cut in 2020, although they are pretty much sticking to their EPS forecast for 2021.

They add that the group's financial strength is increasing. Meanwhile, the stock continues to trade at very low multiples (2019e P/E of 8.8x, 2020e P/E of 8.3x and 2021e P/E of 7.9x, with a 2019e yield of 5.9%, with the stock trading at a heavy discount (slightly over 20%) relative to its sector.

Oddo believes that this discount should gradually decrease due to the expected improvement in the AXA XL's OP and the group's rapid deleveraging, which improves the outlook for a capital return to shareholders as from next year.

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