If you’re looking for exposure to the financial sector, then it could be worth looking closer at the shares listed below.
The ASX 200 financials shares have been rated as buys by analysts at Morgans and tipped to provide strong returns for investors. They are as follows:
Macquarie Group Ltd (ASX: MQG)
Morgans is a fan of this investment bank and has an add rating and $215.00 price target on its shares. Based on the current Macquarie share price of $182.90, this implies potential upside of 18% for investors over the next 12 months.
The broker likes Macquarie due to its exposure to structural growth markets such as decarbonisation. It commented:
We continue to like MQG’s exposure to long-term structural growth areas such as infrastructure and renewables. The company also stands to benefit from recent market volatility through its trading businesses, while the company continues to gain market share in Australian mortgages.
QBE Insurance Group Ltd (ASX: QBE)
Another ASX 200 financials share that Morgans is bullish is on this insurance giant. Its analysts currently have an add rating and $14.45 price target on its shares. Based on the current QBE share price of $12.14, this suggests potential upside of 19% for investors.
Morgans believes QBE is well-placed to grow its earnings thanks to rate increases and cost reductions. It also feels the company’s shares are relatively cheap at the current level. The broker explained:
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.
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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 recommended Macquarie Group Limited. 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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