QBE Insurance Group Ltd (ASX: QBE) shares have been on fire over the last 12 months.
As you can see on the chart below, the insurance giant's shares have risen an incredible 38%.
Clearly, expectations are high for QBE in FY 2023. So, with the company's half-year results due to be released in the coming weeks, let's take a look to see what the market is expecting from the insurer.
What is expected from QBE's half-year results?
Goldman Sachs is expecting QBE to report strong numbers when it releases its half-year results on 10 August.
According to the note, the broker expects gross written premiums of US$12,802 million. This would be an increase of 10.3% year-on-year from US$11,609 million. This is in line with management's guidance for the full year. Goldman commented:
QBE expects Group constant currency GWP growth of ~10% for FY23 on FY22 reflecting strong premium growth (rate and volume). QBE also expects premium rate increases to remain firm for the foreseeable future with 10% flagged over 1H23.
Things are expected to be even better for the company's earnings according to Goldman Sachs.
It has pencilled in an adjusted cash net profit after tax of US$478 million for the half. This represents an 83% increase on the prior corresponding period.
Goldman expects this to support a fully franked interim dividend of 23.7 Australian cents per share. This is up from 9 cents per share a year earlier.
Are QBE shares good value?
Despite its heroics over the last 12 months, Goldman continues to see value in QBE shares at the current level.
The note reveals that the broker has retained its buy rating with a $17.98 price target. This implies a potential upside of 13% for investors over the next 12 months. Its analysts conclude:
We continue to like QBE noting 1) Strong top line GWP growth and continued rate increases which should benefit balance of FY23 / FY24 2) Underlying trends ex CAT / PYD appear to be improving with claims inflation in line with expectations and continued strong rate. 3) North America strategic initiatives expected to drive COR improvement. 4) Trades at 11x FY23 and about 9x FY24 on GSe.
