Insights

Why does this broker see another 33% upside in the QBE share price?

The insurer looks set to deliver considerable upside, according to more than one broker.
The post Why does this broker see another 33% upside in the QBE share price? appeared first on The Motley Fool Australia. –

The QBE Insurance Group Ltd (ASX: QBE) share price closed 1.12% lower at $12.37 on Wednesday.

After a shaky period in 2021, QBE shares have rebounded once again, gaining almost 9% this year to date.

Meanwhile, in wider market moves, the S&P/ASX 200 Financials index (ASX: XFJ) closed down 1.08% today at 6,495.5.

More upside for QBE to come?

According to the team at JP Morgan, that could very well be the case. Its analysts are baking in considerable upside for QBE in 2022.

“As a global commercial insurer, QBE is subject to the vagaries of the insurance cycle and volatile natural catastrophes,” the broker said in a recent note.

“Trends in the cycle are currently improving, and there could be further upside from premium rates, providing a tailwind for earnings growth, with investment yields a headwind,” it added.

Building the case for JP Morgan was QBE’s income derived from gross written premium (GWP) in the previous quarter. It grew 19% on the prior corresponding period.

As a result, it has increased its earnings estimates for the company from 2023. Its analysts said:

We have increased earnings in CY23 approximately 10% due predominantly to some upside on yields and strong GWP.

CY22 earnings are impacted by perils and the run-off insurance contracts, offset by higher yields, leaving no room for material changes.

Upside catalysts include more success at taking expense and claim costs out of the business than we give credit for, a quick turnaround in the economy, a limited impact from COVID-19-related losses, stronger premium rate increases, and global interest rates holding up better than currently expected.

Consequently JP Morgan is overweight on QBE shares and urges its clients to buy at the current levels, valuing the company at $16.50 per share – an upside potential of 33% from the current share price.

JP Morgan is joined by an extensive list of 10 analysts also advocating buying the stock. That’s 91% of coverage with just one broker saying to hold, according to Bloomberg data. There are no sell ratings on this list.

Meanwhile, QBE shares continue powering on, and have now rushed 17% higher in the last 12 months after this most recent bull run.

The post Why does this broker see another 33% upside in the QBE share price? appeared first on The Motley Fool Australia.

Should you invest $1,000 in QBE Insurance Group right now?

Before you consider QBE Insurance Group, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and QBE Insurance Group wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

More reading

Why Alliance Aviation, Amcor, Core Lithium, and QBE shares are storming higher
QBE share price lifts despite potential $100m impact of Ukraine conflict
Expert says investors are ‘missing this inflection point’ for QBE shares
QBE share price riding on these 3 ‘macro tailwinds’, analysts say

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!