Fund Manager Summary
The fund managers believe the outlook for Medibank Private Ltd presents both challenges and opportunities. In their opinion, the recent share price of approximately $4.35 reflects a positive performance driven by a strong result and a favorable government rate announcement. However, they note a significant concern regarding government pressure on insurers to increase payments to private hospitals, which could impact profitability. Despite these challenges, the fund managers maintain that the sector remains fundamentally challenged due to structural headwinds, suggesting a cautious approach for potential investors. Overall, while there are positive indicators, the inherent risks associated with government policies and sector dynamics warrant careful consideration.
Source: Trading View
Commentary From The Managers
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Pendal Group
3 Nov 2025
$4.84
Summary
- Pendal Group updates their investment thesis on Medibank Private Ltd (MPL) following the recent investor day.
- The focus was on the Medibank Health division, which offers wellbeing services, telehealth, at-home care, and new hospital ventures.
- This division, while small, is crucial for sustainability and aims to position MPL as an integrated player in the healthcare sector.
- MPL has set a new target to grow this division to $200m operating profit by FY30, exceeding consensus forecasts of $126m.
- If successful, this growth could add 6% to consensus earnings by FY30.
- Key growth drivers include organic revenue growth of ~10%, supported by at-home care and new health monitoring technologies.
- Additional support is expected from fixed cost leverage, maturation of hospital ventures, and increased capital deployment.
- Achievement of these targets could result in a mid-to-high single digit EPS CAGR and a differentiated franchise compared to health insurance peers.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Pendal Group
3 Nov 2025
$4.84
- Pendal Group updates their investment thesis on Medibank Private Ltd (MPL) following the recent investor day.
- The focus was on the Medibank Health division, which offers wellbeing services, telehealth, at-home care, and new hospital ventures.
- This division, while small, is crucial for sustainability and aims to position MPL as an integrated player in the healthcare sector.
- MPL has set a new target to grow this division to $200m operating profit by FY30, exceeding consensus forecasts of $126m.
- If successful, this growth could add 6% to consensus earnings by FY30.
- Key growth drivers include organic revenue growth of ~10%, supported by at-home care and new health monitoring technologies.
- Additional support is expected from fixed cost leverage, maturation of hospital ventures, and increased capital deployment.
- Achievement of these targets could result in a mid-to-high single digit EPS CAGR and a differentiated franchise compared to health insurance peers.
Summary
Airlie Funds Management
1 Aug 2025
$5.04
- Airlie Funds Management notes a strong performance from Medibank Private, with a 30% increase over the past year, including dividends.
- The fund has trimmed its position in Medibank, reflecting its significant size in the portfolio.
- Despite the trim, the investment setup remains attractive, with good potential for growth.
- There is decent policyholder growth and manageable claims expected to continue.
- Regulatory risks are present, particularly with hospital operators facing challenges and seeking government intervention.
- Overall, Medibank is well-positioned for ongoing growth, bolstered by strong market share and effective management during COVID.
- Airlie Funds Management anticipates that the company will continue to deliver positive results moving forward.
Summary
Alphinity Investment Management
17 June 2025
$4.90
- Alphinity Investment Management considers Medibank (ASX: MPL) as one of their top portfolio positions.
- Medibank has shown consistent earnings upgrades over the last three years.
- The company benefits from a high quality management team skilled in managing claims.
- Medibank has been proactive in changing clinical practices to improve patient outcomes and reduce claims costs.
- The combination of these factors has led to consistent earnings outperformance.
- Alphinity's confidence is based on real underlying fundamentals driving these upgrades.
- This trend is not viewed as a short-term blip, but rather a sustained pattern.
- As long as earnings revisions persist, Medibank is seen as a core contributor to portfolio alpha.
Summary
Airlie Funds Management
31 Mar 2025
$4.44
- Airlie Funds Management continues to hold Medibank Private due to a solid 1H25 result.
- The company announced a premium rate rise of 3.99%, exceeding market expectations.
- This increase has helped reduce some of the "regulatory risk" discount previously affecting the stock.
- The positive performance reflects confidence in Medibank's operational stability.
Summary
Ten Cap
28 Feb 2025
$4.35
- Ten Cap notes a positive performance from Medibank, highlighted by a beat in results.
- Coinciding with this was a surprisingly positive government rate announcement.
- However, there is a noted dislocation in rate and rhetoric.
- The government has urged insurers to pay more to private hospitals.
- Ten Cap continues to view the sector as fundamentally challenged.
- This challenge is attributed to ongoing structural headwinds.
Summary
Airlie Funds Management
30 Sept 2024
$3.65
- Airlie Funds Management views Medibank as pivotal in Australia’s health transition, serving over 4.2m customers and alleviating pressure on the public healthcare system.
- Medibank paid out $6.3bn in health insurance claims in the last financial year, underscoring its role in funding medical care.
- Regulatory tensions exist as the private health insurance sector faces criticism for profitability amid rising healthcare costs.
- Private hospitals are struggling due to labor shortages and inflation, leading to calls for government bailouts, which may not resolve underlying structural issues.
- Medibank is investing in new models of care, shifting focus from expensive hospital stays to virtual care and home care, aiming to lower overall healthcare costs.
- The transition is essential to prevent increased government spending on healthcare, estimated to rise significantly over the next forty years.
- Federal Health Minister acknowledges that the government cannot sustain unprofitable hospital models and that some closures may be necessary.
- Medibank has returned $1.46bn to customers during the pandemic, maintaining a gross profit margin below pre-pandemic levels, indicating a commitment to not profiting from the crisis.
- Despite regulatory uncertainties, Airlie Funds Management sees an investment opportunity in Medibank, which has grown earnings per share at 8% p.a. over the past decade.
- Medibank exhibits financial strength with a capital ratio of 14.1% and zero debt, positioning it well for future challenges.
- As Australia’s largest health insurer, Medibank holds a 27% market share, allowing it to negotiate better terms with hospitals.
- Management quality is strong under CEO David Koczkar, who has driven policyholder growth and cost management since 2014.
- Valuation metrics are attractive, with Medibank trading below its long-term P/E average and offering a dividend yield of 4.6%.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"While Medibank appears to have navigated recent results adeptly, the underlying structural headwinds in the insurance sector suggest a precarious future. The government's push for higher payments to private hospitals could further complicate the landscape for investors."
Last Updated: 03 Nov 2025
Query The Data
Frequently Asked Questions
Who is investing in Medibank Private Ltd (ASX:MPL)?
Fund managers including Ten Cap, Alphinity Investment Management, Airlie Funds Management and Pendal Group have invested in Medibank Private Ltd (ASX:MPL).
Why do fund managers invest in Medibank Private Ltd?
Fund managers invest in Medibank Private Ltd due to its recent positive performance, highlighted by a strong earnings report and favorable government announcements. However, they acknowledge ongoing challenges in the sector, particularly pressures from the government urging insurers to increase payments to private hospitals, indicating a cautious outlook despite current gains.
What happened to Medibank Private Ltd (ASX:MPL)?
Fund managers are investing in Medibank Private Ltd due to its strong market position and attractive growth prospects. Recent comments highlight a 30% share price increase over 12 months and manageable claims, despite regulatory risks in the healthcare sector. The company is focusing on expanding its Medibank Health division, aiming for significant profit growth by FY30, which is expected to enhance earnings per share. Overall, fund managers view Medibank as well-managed and well-positioned for continued growth in a challenging environment.