Morningstar has a “buy” recommendation on QBE Insurance Group after news it is merging its small, but fast growing, Asia-Pacific operation with the underperforming Latin America business to create a single emerging markets division.
“The restructure provides the opportunity to reduce costs and enables the newly integrated and streamlined division to focus on building a substantial and profitable emerging markets presence. The narrow-moat rated global insurer is on track to re-establish its reputation for earnings stability and predictability,” Morningstar said.
“QBE Insurance is not the ‘basket case’ assumed by many and we would be surprised to see further material downgrades. QBE Insurance announces half-year results on August 19, 2014, and we cannot stress enough how important it is for management to deliver on expectations.
“Any negative surprises will be poorly received and dash hopes of any meaningful share price recovery this year. Investor confidence is so poor, the company needs to also deliver much improved performance for 2014 when full-year results are released in February 2015. We are confident in the turnaround with our $16.00 fair value estimate unchanged as is our medium uncertainty rating. The stock is undervalued, currently trading 31
Bloody hope sooo!!!!!!!!!!!!!!!!!!!!!!! Zess
QBE Price at posting:
$11.11 Sentiment: None Disclosure: Unspecified
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