Morgan Stanley notes the company’s high-performing London market specialty business, historically, has experienced margins declining -10 percentage points since 2012.
However, positive pricing is being observed and there are double-digit rate increases in some London market lines.
QBE has highlighted very strong rates in the first half. Given the company’s strong relative performance compared with other London market participants, any sustained pricing creates meaningful upside, in the broker’s view.
Overweight rating maintained. Target is $13.00. Industry view is In-Line.
Target price is $13.00.Current Price is $12.55. Difference: $0.45 – (brackets indicate current price is over target). If QBE meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).