Credit Suisse analyst Andrew Adams upgraded QBE Insurance Group Ltd. to "outperform" from "neutral" and raised the price target to A$15 from A$12.55.
The analyst wrote that the positive momentum has been building around commercial line premium rates in recent quarters, which is an important driver for the company's earnings. With a superior growth profile to its peers, the company's expected earnings growth is seen supporting share price expansion from current levels, the analyst noted.
Adams remains confident in the recovery potential of QBE Insurance's earnings and believes that reserving risk appears to be manageable. However, a potential decline in investment returns remains a key downside risk to QBE Insurance's earnings and valuation.