Analysts rate ASX-listed companies QBE Insurance Group (AU:QBE) and Allkem Limited (AU:AKE) as Buy. Analysts are overall bullish on both stocks, and the recently reported numbers for their 2022 earnings have further boosted their confidence in these companies.
Let’s have a look at these companies in detail.
QBE Insurance Group Limited
QBE is an insurance and reinsurance company with a presence in 27 countries. The company offers personal, commercial, vehicle, home, and other insurance services.
The company’s stock has been trading up by 26% in the last year, guided by its strong underwriting performance.
The gross written premium for 2022 was up by 13% to $20 billion as compared to the previous year. The company also posted $770 million of net profit after tax in its 2022 annual results, up from $750 million in 2021.
Analysts are looking at higher organic growth for the company in 2023. Insurance as a business performs well during tougher economic conditions, and it also leads to higher premiums in a high-interest rate environment.
Yesterday, analyst Doron Kur from Credit Suisse reiterated his Buy rating on the stock. His price target of AU$18.7 suggests an upside of 33.2% on the current price.
What is QBE Price Target?
QBE stock has a Strong Buy rating on TipRanks, based on 10 Buy and one Sell recommendations.
The average target price is AU$16.45, which is 17.16% higher than the current price.
Allkem Limited
Allkem is a chemical manufacturing company specializing in a portfolio of lithium chemicals. The company has the advantage of the growing demand for lithium and is well-placed geographically to serve the flourishing EV markets.
In its first-half earnings for the fiscal year 2023, Allkem posted a 209% jump in its revenues to $558 million. The earnings grew by more than 300% to $402 million, as compared to $97 million in the same period a year ago.
The numbers were mainly driven by record production numbers at its Olaroz Lithium Facility in Argentina. During the half-yearly period, this facility produced 7,542 tonnes of lithium, which was 17% higher than the previous year’s same period.
Moving forward, the company expects spodumene prices to increase by 5% for the March quarter, which will drive further growth. The lithium carbonate price is forecasted to be around $53,000 per tonne in 2023, up from $43,236 per tonne in 2022.
The company’s stock has been trading down by more than 30% over the last six months. Analysts see this as a buying opportunity based on the company’s higher production outlook, pushing profitability higher despite a decline in overall lithium prices.
Allkem Share Price Target?
According to TipRanks, AKE stock has a Moderate Buy rating, based on six Buy, and two Hold recommendations.
The stock has an average target price of AU$16.15, which implies an upside of 61% on the current price.
Conclusion
Analysts are optimistic about QBE based on premium growth in 2022, which is further expected to continue.
For Allkem, the upside potential is huge based on the company’s record production of lithium amid the growing market for cleaner technologies.
