Why is the Medibank share price trailing NIB over the past year?

Could the NIB share price keep outperforming that of Medibank?

| More on:
Two businesspeople in suits run, one chasing the other.

Image source: Getty Images

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

Key points

  • The NIB share price has outperformed that of Medibank by 21% over the last 12 months 
  • The former stock pulled ahead amid notable gains and falls in 2021
  • However, Medibank's stock has outperformed its peer so far in 2022 and has inspired positive sentiment among some brokers

The Medibank Private Ltd (ASX: MPL) share price has performed well over the last 12 months, but it's also been bested by one of its health insurance peers.

The Medibank share price is currently 9.03% higher than it was this time last year, having finished last week's trade at $3.14.

The NIB Holdings Limited (ASX: NHF) share price, however, has surged an impressive 20.07% over the last 12 months. It's currently valued at $6.52.

For context, the S&P/ASX 200 Index (ASX: XJO) has gained just 6.48% since this time last year.

So, what pushed NIB's stock to outperform that of Medibank over the period? Let's take a look.

Why has the NIB share price outperformed Medibank?

NIB's stock pulled ahead of Medibank's this time last year and managed to hold on to that lead for much of the last 12 months.

That push was brought on by a business update and full-year outlook released by NIB in late April.

Then, the company returned to providing guidance after scrapping the notion in 2020 amid the COVID-19 pandemic.

And it was good guidance, indeed, boosting the NIB share price 10.2% higher.

Though, the NIB share price handed back that gain in August on the release of the company's full-year results.

The Medibank share price's year was far less dramatic. And some brokers seemingly expect the gap between the two stocks' performance to close.

The Motley Fool Australia's Zach Bristow reported JP Morgan favoured Medibank's shares over those of NIB in January.

Additionally, Credit Suisse slapped Medibank's shares with a price target of $3.50 and a 'buy' rating, my colleague, Tristan Harrison, reported in March.

Finally, analysts at Morgans upgraded Medibank's stock to an 'add' with the expectation it will reach $3.43 in late February, according to reporting by James Mickleboro.

So far this year, the Medibank share price has slipped 8.45% while the ASX 200 has slumped 0.87%.

At the same time, the NIB share price has tumbled 10.44%.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Financial Shares

Man smiling at a laptop because of a rising share price.
Financial Shares

AMP share price lifts 8% in October amid improved cashflows

Investors were impressed with AMP's third-quarter report.

Read more »

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

This ASX All Ords stock is down 37%, and one insider just bought up over $500,000 worth

This company director just raised his stake by 1,735%.

Read more »

A young boy reaches up to touch the raindrops on his umbrella, as the sun comes out in the sky behind him.
Financial Shares

IAG share price lifts amid AGM and FY25 guidance

The insurance giant held its annual general meeting today.

Read more »

Delighted adult man, working on a company slogan, on his laptop.
Financial Shares

Top Australian financial stocks to buy now

These companies are well-positioned to grow, brokers say.

Read more »

Shot of a young businesswoman looking stressed out while working in an office.
Financial Shares

$25 billion ASX 200 stock falls on ASIC probe

This blue chip is facing civil penalties, declarations and adverse publicity orders.

Read more »

Man pointing at a blue rising share price graph.
Financial Shares

Up 119% in a year, here's why this ASX financial stock is rocketing again on Tuesday

Investors are optimistic about the outlook for this soaring ASX financial stock.

Read more »

A geeky business man scratches his head as he looks at many stacks of books piled up on the floor.
Share Market News

Here's how the ASX 200 market sectors stacked up last week

ASX financial shares led the 11 market sectors last week with a 4.07% gain.

Read more »

Close-up photo of man's hands holding silver platter with coins and young plant growing out of pile of money
Financial Shares

This ASX All Ords share just reported a 24% leap in a key metric

The ASX All Ords stock completed a key transaction in September.

Read more »