Top broker tips 14% upside for QBE share price

Could the ASX insurance company’s share price climb higher?

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Key points

  • The QBE share price has rocketed 21% in a year
  • The company's shares finished in the green on Monday
  • One broker recently predicted the insurer's shares could surge further 

The QBE Insurance Group (ASX: QBE) share price has soared 21% in a year, but could it do even better?

QBE shares finished at $11.84 on Tuesday, a 1.81% gain. In comparison, the S&P/ASX 200 Index (ASX: XJO) climbed just 0.1%.

Let’s check the outlook for the QBE share price.

Significant upside

The QBE share price plummeted 20% between market close on 17 February and 7 March. However, since this date, the company’s share price has rocketed by more than 17%.

And the team at Morgans has recently recommended QBE as an “add”, placing a $13.50 price target on the share. That’s 14% more than the current share price.

Morgans is positive on the company’s price-to-earnings (P/E) ratio. Commenting on the outlook for QBE, Morgans said:

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 ~14x FY22F PE.

QBE reported an adjusted net profit after tax (NPAT) of $805 million in its FY21 results, released in February. This represented a return on equity of 10.3%. The board declared a final dividend of 19 cents a share.

QBE shares suffered in late February and early March amid the widespread floods in Queensland and New South Wales. The insurer said at the time it was working hard to support customers impacted by the severe weather and floodwaters.

QBE share price snapshot

QBE shares have climbed 4% year to date, but have surged more than 11% in the past month.

For perspective, S&P/ASX 200 Index (ASX: XJO) has returned around 7% in the past 52 weeks.

In the last week, QBE shares are 2% higher.

QBE has a market capitalisation of more than $17.5 billion based on the current share price.

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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