Where are QBE (ASX:QBE) shares headed in 2022?

The giant insurer saw its stock price rocket in 2021. So which way will it go in the new year?

| More on:
a group of people stand examining a large glowing cystral ball held in the hands of one of the group members while the others regard it with various expressions of wonder, curiousity and scepticism.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Insurance giant QBE Insurance Group Ltd (ASX: QBE) has been disappointing for buy-and-hold investors the past few years.

The share price has lost almost 10% over the last 5 years and more than 67% since its peak 14 years ago, just before the global financial crisis.

However, 2021 proved to be something of a comeback year for QBE shares.

Heading into the last 10 days of the year, the stock is up by around 32%.

So is it one to add to your portfolio for 2022?

'Pricing tailwinds' are coming for QBE shares

Morgans investment advisor Jabin Hallihan is one expert who's bullish on QBE shares.

"Our forecast price target is $13.70 amid a dividend yield of 4.2%," he told TheBull last week.

"The stock is relatively inexpensive as it was recently trading on a forecast price-earnings multiple of 12.8 times for fiscal year 2022."

The QBE share price closed Tuesday at $11.29, implying an upside of more than 20% by Morgans' projections.

Hallihan said "pricing tailwinds are evident".

"QBE has increased insurance rates over the past year, which is likely to increase margins and underlying profit into 2022."

QBE is 'major beneficiary' of rising interest rates

Another professional who likes QBE shares as we see off 2021 is Fat Prophets chief executive Angus Geddes.

He said that the insurer has made "substantial improvements" to its operations the last few years, and that's about to bear fruit.

"Narrowing its focus has simplified the business and led to improving underwriting outcomes."

Geddes agrees with Hallihan that pricing is an ace up QBE's sleeve in the coming year.

"The insurance pricing market has become more rational, and QBE's premiums have firmed considerably, which should continue, in our view," he said.

"The business should be a major beneficiary ahead of a steepening yield curve."

'Strong buy', say 6 of 8 analysts

Hallihan and Geddes are far from alone in their optimism for the QBE share price.

According to CMC Markets, 6 out of 8 analysts are currently rating the stock as a "strong buy". The 2 dissenters are rating it as a "hold".

QBE is now helmed by a fresh chief executive, Andrew Horton, who only started in September.

He said last month that his biggest challenge is to reform the culture of the company's 11,500-strong workforce.

"It sounds very easy, but if it's not natural to everybody, it's going to be quite hard," he told Insurance Business

"That's why I need to start with the executive group, being supportive of each other and thinking towards the enterprise, and then cascade that down to the organisation."

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Financial Shares

Woman and man calculating a dividend yield.
Financial Shares

Australian insurance sector: Does Macquarie prefer IAG or Suncorp shares?

Here’s an expert’s views on the insurance sector.

Read more »

A woman sits on a chair smiling as she shops online.
Financial Shares

Which ASX 200 financial share delivered better returns in FY25: IAG, AMP, or Zip?

We compare share price movements and dividend payments for these 3 ASX 200 financial stocks.

Read more »

a man sits in unhappy contemplation staring at his computer on his desk in a home environment, propping his chin on his hand.
Financial Shares

Did Suncorp or QBE insurance shares perform better in the last year?

These insurance providers brought solid returns for investors in the last 12 months. 

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Financial Shares

Up 58% since April, this ASX 200 financial stock just reported record results

The ASX 200 wealth management and technology company has been on a tear since April. Here’s the latest.

Read more »

A young woman smiles as she rides a zip line high above the trees.
Financial Shares

5 best ASX 200 financial shares of FY25 (CBA didn't make the cut!)

These stocks were well and truly 'in the black' for share price growth last financial year.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Financial Shares

Does Macquarie rate IAG Insurance shares a buy, hold or sell?

The insurer's share price has slumped this week.

Read more »

Worried woman calculating domestic bills.
Financial Shares

What's the outlook for household deposit growth for the big 4 banks?

Household deposit growth has accelerated over the past two years.

Read more »

A man looking at his laptop and thinking.
Broker Notes

After crashing more than 21% yesterday, does Macquarie rate Helia shares a buy?

Should I buy the big dip on Helia shares? Here’s Macquarie’s latest share price forecast.

Read more »