The FY23 result for QBE Insurance was fundamentally good, according to Morgans, despite weaker-than-forecast headline numbers, and a -2% profit miss versus the consensus forecast. The broker liked the 16% return on equity (ROE) and very strong balance sheet.

Also slightly softer than consensus estimates, FY24 guidance is more mid-single-digit gross written premium (GWP) growth and a combined operating ratio (COR) of 93.5%.

More positively, the International business registered a very strong result, notes the analyst, but the North American performance weighed with a disappointing underwriting result.

The target rises to $17.96 from $17.56 on the broker's slightly softer GWP and margin assumptions, offset by a valuation roll-forward, and the Add rating is maintained.

Sector: Insurance.

Target price is $17.96.Current Price is $16.11. Difference: $1.85 - (brackets indicate current price is over target). If QBE meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2024 Acquisdata Pty Ltd., source FN Arena