Axa Rises on News of Share Buyback, Upbeat Guidance

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Investing.com — Axa (EPA:AXAF) stock rose nearly 5% on Wednesday after the insurance and asset management giant announced a billion-euro buyback and offered reassuring guidance for the rest of the year.

The French-based company said it was “very confident” about meeting the targets of its medium-term strategy, notably seeing earnings per share “notably underlying earnings per share growth at the high end of our target range” of 3-7%.

Axa has promised to use buybacks to underpin earnings per share as it sells off assets to simplify a group structure that some investors had criticized as too complex and unfocused. It had already bought back some 2.2 billion euros of stock in the first half, but the pressures of the economic slowdown and rising inflation had raised some doubts as to its ability to deliver on that promise.

Its first half results on Wednesday eased any such fears, with an 11% rise in underlying EPS and a 15.8% underlying return on equity.

Chief executive Thomas Buberl said the numbers reflected “strong organic earnings growth recorded across all our lines of business.”

Axa’s push into health insurance, in particular, appeared to make strong progress, with revenue rising 13%.

Even so, the group appeared to be running hard to stand still. Gross revenue adjusted for foreign exchange swings was up only 1% from a year earlier, while net profit was flat. The euro’s decline over the period generated a modest rise in both numbers on a reported basis.

By 5 AM ET (0900 GMT), Axa stock was up 4.6% in Paris, just off the two-month high it hit earlier in the session. The stock is still down 11% so far this year.

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