The QBE (ASX:QBE) share price has slumped 6% in 4 weeks. What’s happening?

Can the company’s shares recover from its recent fall?

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Falling asx share price represented by young male investor sitting sadly in front of laptop

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The QBE Insurance Group Ltd (ASX: QBE) share price has been out of form over the past month.

The insurance giant hasn’t released any market-sensitive news since announcing its fixed-rate resetting subordinated notes last week.

Wednesday’s market close added another 2.09% loss for the month, bringing QBE shares down a total of 6.84%.

Let’s take a look at what could be dragging the company’s shares lower.

What’s dragging QBE shares lower?

There are a couple of possible catalysts as to why the QBE share price has sagged in recent times.

Firstly, when QBE reported its half-year scorecard to the market, its shares accelerated to a 52-week high of $12.72.

The group highlighted a material turnaround in both underwriting and investment returns underpinned by strong profit growth. This led to an improvement in the company’s bottom line, recording a cash surplus.

Investors reacted positively to the news, sending QBE shares 8% higher on the day of the announcement. However, the share price boost was short-lived, as investors appear to be indulging in some profit-taking in the aftermath. The company’s shares are now trading at levels experienced before QBE published its bi-annual results.

Another reason which might be weighing on the QBE share price is a broker note from Goldman Sachs.

The multinational investment firm slapped a buy rating on QBE shares with a 12-month price target of $13.41. But some downside risks remain which could affect its shares for the second half of FY21.

These include the execution of efficiency programs being more difficult in the current market. The scope for recent rate increases may also reduce given COVID-19 economic headwinds.

Additionally, the broker pointed to an above-average catastrophe season expected in the Northern Hemisphere, and uncertain conditions in the Australian housing market.

QBE share price snapshot

While it has been a tough time this month, QBE shares are up around 26% since this time last year. In 2021, its shares have outpaced the S&P/ASX 200 Index (ASX: XJO) by 25% to register a gain of 37%.

Ranked as the 26th largest company on the ASX, QBE presides a market capitalisation of roughly $17.3 billion.

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

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Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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