The QBE Insurance Group Ltd (ASX: QBE) share price has been a poor performer 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 premium to US$18,453 million. This ultimately led to the insurance giant reporting an adjusted cash net profit after tax 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 net profit after tax of US$870 million. Unsurprisingly, this led to its shares 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 cheap at the current level.
It 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 $13.50 price target on the company’s shares. Based on the current QBE share price of $10.36, this implies 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%.
The post Is the QBE (ASX:QBE) share price a bargain after falling 19% in a month? appeared first on The Motley Fool Australia.
Should you invest $1,000 in QBE right now?
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More reading
- 3 more of Morgans’ best ASX share ideas for March
- Here’s why the QBE (ASX:QBE) share price is sliding 5% today
- QBE (ASX:QBE) share price backtracks as CEO realigns group’s strategy
- ASX 200 (ASX:XJO) midday update: Block, Zip tumble, QBE’s asset sale
- ‘$2 billion cost’: How are the floods impacting ASX 200 insurance shares this week?
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 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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