AXA S.A.'s (AXA) common stock achieved our target price on 29 June 2009, reflecting the impact of general recent improvement in financial markets and renewed optimism that the recent recovery will limit investment losses for AXA. While we believe that the company's well diversified and relatively lowrisk business model, supported by a prudent acquisition policy, will benefit the company in the long term and take a positive view of the company's fundamentals, we believe the recent upside in the AXA common stock has been exhausted and we see limited potential upside from current price levels. Hence, we downgrade the common stock from a BUY to a HOLD. We now anticipate a positive currency impact on the ADR reflecting our revised expectation that the US dollar will depreciate relative to Euro over our investment horizon. Although the target price does not support a BUY rating at current levels, given that our anticipation of a positive currency impact will lead us to significantly increase our target price, we upgrade the ADR from a HOLD to a BUY.

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