QBE Insurance Group (QBE) Share Trading Recommendation

QBE Insurance Group (QBE) has an increased share price target of $34.50 (from $30) and a retained Buy/Medium Risk trading recommendation from share analyst Citigroup Investment Research (CIR). The analyst sees QBE as a good relative play in a market where most financial services stocks are trading expensive. CIR's earnings changes largely play catch-up on the Winterthur deal earlier this month, though they have also applied a further nudge to their FY08E forecasts. Their EPS changes are: FY07E: +4%; FY08E: +12%. CIR are forecasting a 22.2% margin for FY06E, but they believe even this could be exceeded depending to what degree QBE decides to strengthen its reserving assumptions. Early evidence on the 1 Jan renewals suggests a perhaps surprisingly orderly market in reinsurance with rates flat to slightly down in most classes, while in primary lines weakness is still being seen in many commercial classes. US retrocession rates, however, posted further sharp increases. With two relatively large recent US acquisitions to integrate, QBE suggests that more major US acquisitions are off the agenda for now. However, this does not prohibit further sizeable acquisitions in other jurisdictions and, in CIR's view, it still has plenty of balance sheet flexibility to enable it to take further advantage of the P/E arbitrage opportunity.

QBE Insurance Group Limited is listed on the Australian Stock Exchange (ASX) under stock code QBE. You can view their investor website here. QBE was listed on the ASX on 28 June, 1973. Find out the meaning of the recommendations in this primer. John Cloney is the Chairman of QBE Insurance and Francis O'Halloran the CEO. The company is involved in underwriting general and reinsurance risks, investment management and the management of the economic entity's share of the NSW and Victorian workers' compensation scheme. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade QBE. Check your charts and good luck with your share trading!