The QBE Insurance Group Ltd (ASX: QBE) share price has been a poor performer on the ASX in recent weeks.
Since this time last month, the insurance giant's shares are down a disappointing 19%.
What's going on with the QBE share price?
There have been a few catalysts for the weakness in the QBE share price over the last few weeks.
These include its shares trading ex-dividend for its final dividend, the east coast floods, and its full-year results release.
In respect to the latter, for the 12 months ended 31 December, QBE delivered a 25.7% increase in gross written premiums to US$18,453 million. This ultimately led to the insurer reporting an adjusted cash net profit after tax (NPAT) of US$805 million.
While this may look strong at first glance, it was actually a big miss. The market consensus estimate was for a cash NPAT of US$870 million. Unsurprisingly, this led to the QBE share price falling heavily following the release.
Is this a buying opportunity?
One leading broker that sees a lot of value in the QBE share price is Morgans. Earlier this week, the broker put the insurance giant on its best ideas list for the month of March. Its analysts believe the company's shares are currently cheap.
Morgans commented:
With strong rate increases still flowing through QBE's insurance book, and further cost-out benefits to come, we expect QBE's earnings profile to improve strongly over the next few years. The stock also has a robust balance sheet and remains relatively inexpensive overall trading on ~12x FY22F PE.
Morgans has an add rating and a $13.50 price target on the company's shares. Based on the current QBE share price of $10.36, this implies a potential upside of 30% over the next 12 months.
The broker is also expecting a 58.2 cents per share dividend in FY 2022, which would mean a 5.6% dividend yield. All in all, this brings the total return on offer to approximately 36%.
