Axos Financial (AX) Upgraded to Buy: Here's Why

Core Viewpoint - Axos Financial (AX) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which are crucial for stock price movements [1][2][4]. Earnings Estimates and Stock Price Correlation - The Zacks rating system highlights the strong correlation between changes in earnings estimates and stock price movements, driven by institutional investors who adjust their valuations based on these estimates [3][5]. - An increase in earnings estimates typically leads to higher fair value for a stock, prompting institutional buying or selling, which influences stock prices [3]. Axos Financial's Earnings Outlook - For the fiscal year ending June 2026, Axos Financial is expected to earn $7.85 per share, consistent with the previous year's figure, while the Zacks Consensus Estimate has increased by 2.4% over the past three months [7]. - The upgrade to Zacks Rank 2 places Axos Financial in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [9]. Zacks Rank System Overview - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [6][8]. - The system maintains a balanced distribution of ratings, ensuring that only the top 5% of stocks receive a "Strong Buy" rating, while the next 15% are rated as "Buy" [8].