The QBE Insurance Group Ltd (ASX: QBE) share price has been among the best performers on the ASX 200 in 2021.
Since the start of the year, the insurance giant's shares have risen just over 40%.
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Can the QBE share price keep on rising?
The good news for shareholders is that one leading broker still believes the QBE share price can keep rising from here.
According to a recent note out of Goldman Sachs, its analysts have a conviction buy rating and $13.41 price target on its shares.
Based on the current QBE share price of $12.05, this implies potential upside of 11% over the next 12 months before dividends.
Furthermore, Goldman is forecasting partially franked dividends per share of 37 cents in FY 2021 and then 58 cents in FY 2022. This represents yields of 3.1% and 4.8%, respectively, over the two financial years.
What did the broker say?
Goldman was very pleased with QBE's performance during the first half of FY 2021 and notes that it delivered a result ahead of its expectations.
It commented: "QBE's 1H21 cash NPAT of US$467mn was 41% ahead of our US$330mn estimate. DPS of A11c was however below our A19c estimate (interim payout ratio of 27%) while the balance sheet remains in good shape, with the PCA ratio at 1.73x (GSe 1.70x) and gearing at 31.1%."
Overall, the broker believes its headline earnings are now representing underlying momentum. As a result, its analysts have upgraded their earnings estimates for the coming years.
It explained: "On balance, we upgrade our FY21-FY23 cash EPS by +13%/+5%/+3%, largely a function of reduced COVID costs and 1H releases in FY21, though stronger growth and margin in FY22/FY23."
"We note QBE formally flagged an intention to increase growth asset exposure in its investment portfolio over the medium term. With excess capital seemingly earmarked for growth currently, we have not yet modelled any re-weighting, though note a shift from the current 7% growth asset mix to the 15% ceiling at current FUM (and a 50bps running yield) would equate to a normalised annualised NPAT uplift of c.US$100m," it added.
All in all, the QBE share price may be smashing the market this year, but this leading broker believes it could continue doing so over the next 12 months.
