QBE: Goldman Sachs upgrades to 'buy

Per AFR

QBE: Goldman Sachs upgrades to 'buy'Robert GuyGoldman Sachs has upgraded QBE Insurance to 'buy' from 'neutral', arguing this week's $1.3 billion capital raising offers an opportunity to close its valuation discount to the S&P/ASX 200.The broker says both QBE and Suncorp have been oversold but "the opportunity looks most compelling" for QBE.The stock is trading on a prospective 2021 price-earnings multiple of 11 times, which is only "mildly" above its 15-year and global financial crisis trough of 9 times.QBE is trading at a 35 per cent discount to the S&P/ASX 200 Index compared to a discount of 20 per cent seen over a five year basis."We think the discount looks particularly pronounced following balance sheet initiatives taken this week, and broader efforts to simplify / de-risk the business in recent years, leaving it much better placed leading into this downturn than has been the case previously."Goldman Sachs' price target is $11.27 a share.