The NIB Holdings Limited (ASX: NHF) share price is on course to have a positive finish to the week.
The private health insurer's shares have climbed 2.5% higher to $5.39 in morning trade.
Why is the NIB share price on the rise?
Investors have been buying NIB shares today after it was the subject of a reasonably positive broker note this morning.
According to a note out of Goldman Sachs, its analysts have taken their sell rating off NIB's shares and upgraded them to a neutral rating with a price target of $5.48.
Goldman made the move after a pullback in its share price in March brought it down to a level which it feels reflects the risks that it is exposed to in the near term.
These risks include the pre-election release of the terms of reference for the Labor Party's Productivity Commission, the outcome of the Federal election and potential changes to the premium-cap, and the initial draft of APRA's new private health insurance capital standard.
Incidentally, Goldman Sachs has retained its sell rating on rival private health insurer Medibank Private Ltd (ASX: MPL). It has a $2.46 price target on its shares.
Should you buy NIB shares?
I would have to agree with Goldman Sachs on NIB right now.
Whilst I'm not a buyer of its shares for the aforementioned risks and the tough trading conditions that the industry is experiencing, I wouldn't be a seller of its shares if I already owned them.
Goldman Sachs expects NIB to achieve earnings per share of 31 cents in both FY 2019 and FY 2020. This means its shares are currently changing hands at 17x estimated full year earnings, which I think that is about fair for the company at this point. Especially given its fully franked 4% dividend yield.
