Goldmans Sachs thinks Medibank shares are a sell

If Goldman's analysis is on the money Medibank shares cloud slide around 14% in less than 12 months. 

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It could be time to sell your Medibank Private Ltd (ASX: MPL) shares if the analysts at Goldman Sachs are on the money. According to a November 19 research note out of the Goldman's desk Medibank's 12-month share price target is just $2.68.

Goldman's is bearish on both Medibank and NIB Holdings Limited (ASX: NHF) on the back of September quarter data out of APRA on the private health insurance industry.

According to Goldman's the data points to rising claims costs and lower policy take ups. 

Moreover, Goldman's is worried that claims inflation will outpace the level of premium increases (estimated at <3%) the government will permit in 2020.

This suggests gross margins are set to come under pressure and "seems at odds with current c.20x PEs (price-to-earnings multiples) for MPL/NHF."

If Goldman's analysis is on the money Medibank shares cloud slide around 14% in less than 12 months. 

Should you invest $1,000 in Arb Corporation right now?

Before you buy Arb Corporation shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Arb Corporation wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 6 March 2025

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Share Market News

Which ASX sectors led the pack in March, according to Macquarie?

It was a volatile month for ASX 200 shares...

Read more »

Silhouettes of nine people climbing a steep mountain to the top at sunset, and helping each other along the way.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX was rocked by 'Liberation Day' this Thursday.

Read more »

A mature age woman with a groovy short haircut and glasses, sits at her computer, pen in hand thinking about information she is seeing on the screen.
Superannuation

AustralianSuper sticks with US stocks despite recent turmoil

AustralianSuper’s head of international equities says they won't be shifting focus to Europe.

Read more »

Smiling man sits in front of a graph on computer while using his mobile phone.
Opinions

2 compelling ASX shares I'd buy now following the tariff stock market pain

These investments could make excellent buys in the current market sell-off.

Read more »

Child drinking milk out of a glass.
Share Gainers

Guess which ASX All Ords share just rocketed 12% in today's crashing market?

This ASX All Ords share is surging today despite the Trump tariff market turmoil. But why?

Read more »

Excited couple celebrating success while looking at smartphone.
Share Gainers

Why Astral, Newmont, Ramelius, and Synlait shares are defying the market selloff and rising

These shares are rising despite the market weakness today. But why?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why ANZ, Breville, Cettire, and Treasury Wine shares are dropping today

These shares are having a tough time on Thursday. But why?

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Share Market News

How are ASX 200 investors responding to the new Trump tariffs today?

Australia didn’t escape the new Trump tariffs. Here’s how ASX investors are repositioning today.

Read more »