Credit Suisse finds considerable uncertainty prevails for FY20 and FY21 earnings and does not envisage much upside for the share price. The broker finds listed health insurers expensive.
Read MoreFirst half results were strong and Deutsche Bank notes ambitious medium-term targets. The company has also flagged the possibility of capital management at its full-year results.
Read MoreMorgan 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.
Read MoreMacquarie 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.
Read MoreMacquarie believes the potential for a limit on health insurance pricing creates significant margin risks for the industry.
Read MoreMacquarie’s forecasts now include 2% average premium rises in April 2019 and April 2020, regardless of a change in government. The broker accelerates its forecast long-term margin decline to 6%, consistent with the long-term average profitability of the industry.
Read MoreUBS considers consumers of the winner with the government’s reforms for private health insurance. While on balance the initiatives suggests claims growth will slow it is not clear that an orderly trajectory will ensue, as the broker notes some initiatives are inflationary.
Read MoreMedibank Private (ASX: MPL) has endured a bumpy ride since listing in 2014. But recent management comments point to a company in transition, with potential growth on the horizon.
Read MoreMacquarie observes policy holder disputes are at the lowest level since 2000. This reduced level of disputes, amid expectations that IT system problems will diminish, increase the potential for improved customer retention and a more positive FY18, the broker believes.
Read MoreMedibank 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.
Read MoreThe commentary at the AGM points to a softening top line in the first quarter. The company still expects some normalisation in claims trends from favourable FY16 level.
Read MoreCiti analysts note GWP has only grown by 1.3% in FY17 to date, below even the subdued guidance the company provided in August. Management has now toward a lower health insurance operating profit.
Read MoreValue and affordability remain issues in health insurance, driven by increased utilisation and declining participation among young people.
Read MoreMorgan Stanley believes the company is over earning and margins are set to peak in FY16/17. The broker considers the near-term upside is priced in and downgrades to Underweight from Equal-weight. Target is raised to $2.60 from $2.10.
Read MoreAPRA released December quarter data on the health insurance industry last month. This shows that private health insurance penetration fell for the first time in 10 years. While the percentage of Australian residents that had private hospital insurance only fell 0.1 per cent to 47.2 per cent, this will be of great concern to the Government given that falling coverage rates inevitably sees the healthcare burden fall back onto the public system.
A moderation in claims growth has improved gross margin and profitability in the first half. Macquarie believes the risk to FY16 earnings is skewed to the upside.
Read MoreAustralia’s largest health fund by policy numbers and premium value in the market, BUPA, has released 2015 profit numbers and warned of market conditions remaining challenging in 2016.
Read MoreHealth insurers have received government approval for an annual round of premium increases that were lower than historically the case, but also greater than many brokers had feared. Is this a good outcome? It depends.
Read MoreCiti analysts have updated their sector assumptions, projections and insights for insurers in Australia ahead of upcoming financial reports.
Read MorePress reports suggest the minister has written to private health insurers asking them to lower their premium increases or justify them with further information.
Read MoreMedibank Private (MPL) surprised brokers by announcing a substantial upgrade to earnings guidance for FY16 but questions are raised about the sustainability of margins and, therefore, how long growth can continue.
Read MoreThe big surprise from the recent reporting season was Medibank Private (ASX:MPL). Guidance suggests the health insurance operating profit will increase by more than 12 per cent in FY16 to over A$370m on revenue growth of 5.5 per cent. The company also guided to a reduction in the MER to 8.3 per cent and below 8 per cent in 2017. This is a lot better than we had forecast and the market had been of the opinion that most of the margin expansion from a falling MER had been realised.
Read MoreOn 2 July 2015, Medibank Private (ASX:MPL) announced that it will end its contract with Calvary Health Care from the end of August. This followed a number of press articles discussing the issue being released in prior weeks.
Read MoreThe broker has initiated coverage of Medibank Private with a Buy rating and $2.40 target.
Read MoreShould current trends persist the headwinds for FY16 margins may moderate, UBS surmises. Claims growth has moderated and margins are stable in the latest quarterly industry statistics.
Read MoreMedibank Private (ASX: MPL) presented at the Macquarie Conference for the first time as a public company. Is the company doing enough to maintain a position in both funds?
Read MoreThe Minister for Health has released the premium rate approvals for the Private Health Funds, which will come into effect from 1 April 2015. So what does it mean for our investment with Medibank Private (ASX: MPL)?
Read MoreAs you know, one of the positive arguments for Montgomery funds investing in Medibank Private, is the ability of the company to harness rapidly-advancing technologies to improve patient outcomes and lower private health insurance claims.
Read MoreWith great fanfare, Medibank Private, Australia’s largest health insurer, listed on the Australian Stock Exchange late last year. Before listing, the Commonwealth Government, as the seller of the business, gave retail investors an indicative pricing range of $1.55 to $2.00 per share. The challenge for retail investors was to assess whether or not Medibank was worth materially more than $2.00 per share – thereby ensuring a margin of safety on any potential investment.
Read MoreDespite the investment appeal in a scaled health insurer with a strong brand, UBS is initiating coverage with a sell rating and $2.00 target.
Read MoreThe Medibank Private Limited (MPI) of today commenced its operating life in July 1976 as a “not-for-profit” Government owned health insurer.
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