Medibank Private chief executive Craig Drummond has again warned revenue in the first four months of the financial year is running below expectations. And he warned that 2017 will be a year of fixing the problem, so investors have been told not to expect any pleasant surprises, probably more costs.
Neutral rating retained as Citi adjusts EPS forecasts (slightly) upon marking-to-market led by stronger bonds (lower yields) and stronger equities. The analysts cannot help but conclude this stock looks expensive given the industry's challenged outlook.
Morgan Stanley suspects a 2% cap on premium increases in 2020 and 2021 is a most likely outcome for private health insurers. Private health has emerged as a key policy debate in the upcoming federal election.
Macquarie believes the loss of the Garrison contract is a setback and anticipates lower FY20 guidance for the Medibank Private health division. The broker believes further acquisitions are required to soften the earnings impact of a potential 2% average price rise and the lost earnings from the contract.