QBE remains our preferred local insurance play after its March full year result showcased an improved return on equity of over 20% in the second half. Importantly, the stock remains cheap, trading on an estimated PE of 9.8x compared to its global peer average of around 12x plus. We like the direction of the business over recent times, although much of this has clearly been reflected in the share price, with the stock up over 18% year-to-date.
- We like QBE into pullbacks, but having seen an average retracement in excess of $2.50 each year since COVID, it’s hard to get excited above $17.
MM is neutral towards QBE, around $17.50
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