QBE has already corrected ~14% from its July high as it retreats in anticipation of lower US interest rates. QBE earns income from its premiums in US bonds ahead of payouts on the claims. Last month’s trading update came in largely as expected, and the stock has not moved since early August. QBE’s 1H24 result was broadly in line with expectations. The key to us is that the insurer is too cheap due to its messy history, trading ~10x FY24F PE, well below its global peers.
- Compared to its local peers, QBE is cheap, although it’s been the case for a while.
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QBE Valuation v Australian Peers – Source Bloomberg
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QBE Valuation v Australian Peers – Source Bloomberg
- We believe the current pullback in QBE is starting to present solid value as it tests $16.
MM is bullish QBE medium-term
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