The FY20 results for QBE Insurance Group had largely been pre-released and Morgans states that many of the factors leading to a disappointing profit (NPAT) loss of -US$712m obscured improving underlying profitability trends driven by the ‘Brilliant Basics’ program and an increasingly favourable global pricing environment.
Accordingly, the broker lifts FY20 NPAT loss forecasts, but only slightly reduces EPS forecasts for FY21-FY22 on lower investment yields.
The Add rating is maintained. The target price is increased to $12.07 from $11.28.
Target price is $12.07.Current Price is $10.74. Difference: $1.33 – (brackets indicate current price is over target). If QBE meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).