RBC Capital Markets initiated coverage of French insurer AXA with an “outperform” rating and a €48 price target, implying 28% upside from current levels. Analyst Mandeep Jagpal argues AXA’s valuation doesn’t reflect a decade of structural improvements in profitability and risk management, trading at a 26% discount to European peers despite matching their returns.

AXA trades at 9.1x forward P/E for FY2026, wider than the historical 20% discount to Allianz, Generali and Zurich Insurance Group. The insurer’s return on equity improved to 14-15% by FY2024 from 3-6% in 2018-2020, while its Solvency II ratio reached 216%, among Europe’s strongest. CEO Thomas Buberl’s strategic transactions, including the $15 billion XL Catlin acquisition and €5.4 billion sale of AXA IM to BNP Paribas, have shifted earnings toward 85% technical and fee-based.

RBC is most bullish on AXA’s Life & Health division, forecasting 5% annual earnings growth through 2028 versus 3% consensus. The health combined operating ratio improved to 97.8% in H1 2025 from 99.8% in 2023, aided by AI-assisted claims processing. With a 7.1% dividend yield and 8.8% total capital return including buybacks, RBC values AXA at 10.6x FY2027 earnings, below peers like Aviva at 11.2x and Allianz at 12.5x.