Morgan Stanley lifts price targets for Medibank, NIB ahead of results
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The news: Morgan Stanley analysts have lifted their price targets on Medibank Private and NIB Holdings in anticipation of solid first-half results from both health insurers.
The numbers: The brokerage lifted its price target on Medibank to $3.95 a share from $3.80, while NIB was raised to $6.30 a share from $6.20.
Medibank shares are up 0.9% to $3.99 in early trading, while NIB shares are also up 0.9% to $5.85 each.
The context: The analysts said both health insurers are set for a solid 1H25 result, given broadly supportive industry data and a boost from better markets. Although they expect the government to push back on higher future rate increases given the focus on affordability ahead of an election, Medibank could still see a 3.3% premium increase and NIB 3.9% increase in April.
Similarly, they are forecasting 2.9% first-half policyholder growth for NIB’s domestic Australian residents health insurance (ARHI) business and 1.2% growth for Medibank, based on the strong September quarter data.
What they said: “MPL has delivered best in class margins with more consistency than peers and has several levers to sustain this,” the analysts said in a note. “We see a wider risk-reward at NIB. It has more options to re-rate if it can stabilise margins and it's not dear on ~14x FY26E P/E.”
The source: Morgan Stanley research
