Top broker slaps buy rating on Suncorp Group Ltd shares

The Suncorp Group Ltd (ASX:SUN) share price could be on its way to $14.40 according to one leading broker…

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In morning trade the Suncorp Group Ltd (ASX: SUN) share price has been amongst the best performers on the local share market.

At the time of writing the insurance giant's shares are up 2% to $13.22.

Why are its shares higher today?

With no news out of the insurer this morning, it appears as though today's gain is attributable to a research note out of Goldman Sachs.

According to the note, analysts at the investment bank have upgraded Suncorp's shares to a buy rating with an increased price target of $14.40.

Furthermore, due to the market's low expectations and its attractive valuation, Goldman has added Suncorp to its coveted conviction buy list.

The broker appears to be pleased with the company's efficiency program and is confident that the revenue upside associated with its Marketplace strategy is easily achievable.

Should Suncorp's shares reach the investment bank's price target it would mean a price return of just under 9% from the current share price.

This increases to a hefty 14.5% potential total return if you include its trailing fully franked 5.5% dividend.

Should you invest?

I would have to agree with Goldman on this one.

I think at the current share price Suncorp is a great option for investors, especially with its new operating model starting to show signs of promise.

Furthermore, I feel it provides investors with both value and a generous dividend.

In light of this, I would choose it ahead of insurance rivals QBE Insurance Group Ltd (ASX: QBE) and Insurance Australia Group Ltd (ASX: IAG).

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Insurance Australia Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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