Does Macquarie rate Suncorp shares a buy, hold or sell?

Let's see what the broker is saying about this blue chip.

Suncorp Group Ltd (ASX: SUN) shares were on form this week. Over the five days, the insurance giant's shares rose 3%.

This stretches their six-month return to over 13%.

But are there more gains to come? Let's see what analysts at Macquarie Group Ltd (ASX: MQG) are saying about the company.

A man looking at his laptop and thinking.

Image source: Getty Images

What is the broker saying?

Macquarie has been looking over the company's full year results and its guidance for FY 2026. In respect to the latter, it notes that Suncorp is guiding to a stronger year than rivals Insurance Australia Group Ltd (ASX: IAG) and QBE Insurance Ltd (ASX: QBE). It said:

FY26 guidance GWP Growth: "mid single digits" was slightly more bullish than the outlook for IAG "low-to-mid single digits" and QBE. Given the sharper front to back book pricing strategy employed by SUN, we expect SUN will have greater success with volume growth vs. listed Australian peers as the premium rate environment continues to slow in FY26. Based upon our industry channel checks, we believe CTP, Workers Compensation and Australian Home products in particular will be bright spots for SUN's GWP growth in FY26.

The broker also expects the company to achieve the higher end of its Underlying Insurance Margin in FY 2026. It adds:

FY26 guidance Underlying Insurance Margin: "Towards the top half of 10% to 12%". Our starting position is 11.5% as we bake in some level of conservatism around the Natural Hazards adjustment and the earn-through of that pricing. Having said that, as the premium rate cycle slows, the historical half-on-half seasonality may very well flatten in FY26.

Are Suncorp shares a buy, hold or sell?

According to the note, the broker thinks that Suncorp shares are about fair value at current levels.

This morning, Macquarie has retained its neutral rating on the company's shares with an improved price target of $20.60 (from $19.00).

Based on its current share price of $21.01, this implies potential downside of 2% for investors. Though, with a 4.2% dividend yield expected in FY 2026, the total potential return is a modest 2%.

Commenting on its recommendation, the broker said:

Neutral. A perpetual style buy-back provides long term downside support, but at current levels we believe valuation appears fair. Valuation: 12-month price target A$20.60 (previously A$19.00) based on a Sum of Parts methodology. See valuation section for inputs later in this report.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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