The QBE Insurance Group Ltd (ASX: QBE) share price has been among the best performers on the ASX 200 this year.
Since the start of 2021, the insurance giant's shares have raced almost 34% higher.
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Has the QBE share price peaked?
The good news for anyone that missed out on its gains this year, is that one leading broker still believes the QBE share price can keep climbing.
According to a note out of Morgans, its analysts have an add rating and $13.70 price target on the company's shares.
Based on the current QBE share price of $11.43, this implies potential upside of 20% over the next 12 months.
Another bonus is that Morgans is forecasting a ~65 cents per share dividend in FY 2022. If you add this into the equation, the potential total return increases to over 25%.
Why does Morgans like QBE?
Morgans is bullish on the QBE share price due to its valuation and the company's improving performance.
In respect to the latter, the broker believes QBE's first half result was the best it has delivered in years.
It commented: "QBE Insurance Group's 1H21 NPAT (US$441m) was comfortably ahead of Factset consensus (US$316m), with the 1H21 DPS (A11cps) also above expectations (8cps). Overall, we saw this as a good result, with very strong top-line growth (+20% constant currency), It was QBE's best combined ratio in almost a decade (93.3%), and there was no real negative news."
As for its valuation, the broker believes at under 14x estimated FY 2022 earnings, the QBE share price is great value at present. Particularly given its positive outlook.
Its analysts said: "We see QBE as likely having positive underlying momentum into next year. QBE has been putting through top-line rate increases of around 9%, which should assist margin expansion into FY22. With QBE's balance sheet recently reset, pricing tailwinds evident and the stock relatively inexpensive trading on ~13.5x FY22F PE."
Overall, this could make it worth considering QBE shares this week.
