BofA Securities downgraded AXIS Capital (NYSE: AXS) from Buy to Neutral and lowered its price target slightly to $115.00 from $116.00. Shares fell more than 2% intraday on Tuesday.

The firm noted that AXIS shares had re-rated from roughly 1.0x book value to 1.4x book value over the past two years, driven by new leadership, operational initiatives, and improved returns alongside a stronger balance sheet.

However, BofA said the outlook was becoming more challenging as pricing trends across the insurance sector began to soften. The analyst also expressed concern that AXIS's underwriting profile could become less transparent as managing general agent risk and contract-binding business represented a larger share of underwriting activity.

Given these headwinds, BofA said it viewed the risk-reward profile as more balanced and moved to the sidelines with a Neutral rating.