Three S&P/ASX 200 Index (ASX: XJO) shares set the market ablaze on Friday, each hitting 52-week highs to close out the session.
Technology One Ltd (ASX: TNE), Insurance Australia Group Ltd (ASX: IAG), and QBE Insurance Group Ltd (ASX: QBE) are all showing impressive gains this year.
Let's explore what's driving the remarkable performances of these ASX 200 shares and what top brokers are saying about their prospects.
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Technology One Ltd (ASX: TNE)
Technology One shares surged to a new 52-week high of $18.37 today before retreating slightly to close at $18.23. This reflects an 18.6% increase this year to date.
Bell Potter is particularly bullish on Technology One. According to my colleague James, the broker attributes its success to consistent profit before tax (PBT) growth over the past four years.
Bell Potter believes the ASX 200 shares' PBT growth justifies a re-rating to a higher price-to-earnings (P/E) multiple. It has set a price target of $20.25, calling for 11.6% upside from the current share price. This doesn't include the current 1% trailing dividend yield, totalling nearly 13% potential return.
Goldman Sachs echoes this sentiment. It recently noted the company's strong, visible earnings profile and attractive valuation.
TNE's earnings profile is strong, visible and achievable given the [annual recurring revenue] growth outlook, with Goldman Sachs estimates +17% FY23-26E PBT [compounding annual growth rate] even assuming ARR below management.
The broker rates Technology One a buy with a $18.85 per share price target. After this week's price acton, it is almost there.
Insurance Australia Group Ltd (ASX: IAG)
Insurance Australia Group reached a 52-week high today, climbing to $6.59 per share — a 16% increase in 2024.
My colleague Bronwyn says Citi analyst Nigel Pittaway prefers IAG over Suncorp, citing IAG's cost-cutting opportunities and better market value.
Despite this, Goldman Sachs holds a neutral rating on the ASX 200 share. It acknowledges several positives, including a strong rate cycle in Australia and earnings growth in its Insurance business.
Goldman analysts point out IAG's capital flexibility and potential benefits from a decrease in interest rates.
It also says IAG could grow operating earnings, lowering "its expense ratio from largely rate-driven top-line growth".
Although Goldman's 12-month price target is $6.30, Citi is more optimistic. It projects a $6.75 price target, suggesting a 7% upside.
QBE Insurance Group Ltd (ASX: QBE)
Shares of ASX 200 insurance giant QBE Insurance hit a 52-week high at $18.67 today, marking a 26% increase year-to-date.
Morgans is constructive on QBE, citing strong interest rate increases in its insurance book as a tailwind. It expects dividends per share of 99 cents in FY 2024 and 108 cents in FY 2025 my colleague Jame reports.
The broker has an add rating with a $20.00 price target on QBE.
Goldman Sachs also rates QBE as a buy, noting the ASX 200 share has the "strongest exposure to the commercial rate cycle".
Following the insurer's first quarter results, Goldman analysts increased their forward earnings projections and raised their price target by around 10 cents to $20.90 per share.
If it does hit this mark, it would represent another 52-week high for the company.
