Yahoo Finance Medibank Private Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
It's been a good week for Medibank Private Limited (ASX:MPL) shareholders, because the company has just released its latest half-year results, and the shares gained 7.4% to AU$3.35. Results look mixed - while revenue fell marginally short of analyst estimates at AU$3.6b, statutory earnings beat expectations 7.6%, with Medibank Private reporting profits of AU$0.085 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Medibank Private
Taking into account the latest results, the current consensus from Medibank Private's eleven analysts is for revenues of AU$7.46b in 2023, which would reflect an okay 3.9% increase on its sales over the past 12 months. Statutory earnings per share are predicted to expand 18% to AU$0.17. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$7.47b and earnings per share (EPS) of AU$0.17 in 2023. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at AU$3.52, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Medibank Private, with the most bullish analyst valuing it at AU$4.20 and the most bearish at AU$3.00 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Medibank Private's rate of growth is expected to accelerate meaningfully, with the forecast 7.9% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 1.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Medibank Private is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Medibank Private's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at AU$3.52, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Medibank Private. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Medibank Private analysts - going out to 2025, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Medibank Private , and understanding it should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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