Morgans17/04/20201Add$11.86 51.86%COMMENTARYQBE Insurance has...

Morgans	17/04/2020	1	Add	$11.86	51.86%
COMMENTARY QBE Insurance has completed a US$750m capital raising along with other moves to de-risk the balance sheet. This raises questions for Morgans about the target capital range and risk management of the investment portfolio. The broker makes material downgrades to estimates. However, QBE is considered well-positioned to withstand any challenges in the current environment. Add rating maintained. Target is reduced to $11.86 from $16.23.

Morgan Stanley	16/04/2020	1	Overweight	$12.00	53.65%
COMMENTARY Morgan Stanley expects the capital raising will improve earnings certainty in FY20 and offset an investment-driven first half loss. The dividend is also likely to be cut. QBE reported strong rate increases in the first quarter and 9% growth in gross written premium. Morgan Stanley suspects this level of growth will be hard to sustain and assumes none will occur in the rest of FY20. Overweight rating maintained. Target is reduced to $12.00 from $15.50. Industry view is In-Line.

Credit Suisse	15/04/2020	1	Outperform	$10.15	29.96%
COMMENTARY The first quarter trading update provided few clues for Credit Suisse as to actual earnings, beyond the -US$830m loss on investment income in the quarter. This appears to be driven by a loss on the high-yield and emerging market debt portfolio. QBE has instigated initiatives which include an exit of equities, high-yield and emerging market debt. All up, the broker suggests the capital position is now at the upper end of the target level amid reduced investment risk as well as lower weather and crop risk. Outperform rating maintained. Target is reduced to $10.15 from $12.00.

UBS	15/04/2020	1	Buy	$11.20	43.41%
COMMENTARY Weaker markets have driven larger-than-expected losses in the first quarter. To protect against further market volatility and higher claims scenarios in the short term QBE is seeking to raise US$825m in equity. This will come at a -20% cost to FY21 estimates for earnings per share, UBS calculates. This reflects a lower asset return mix and the capital raising dilution. Still, UBS considers QBE is well-positioned to grow and benefit from leverage to an improving global premium rate backdrop. Buy rating retained. Target is lowered to $11.20 from $13.60.