The NIB Holdings Limited (ASX: NHF) share price is rebounding on Tuesday after a selloff yesterday.
At the time of writing, the private health insurerâs shares are up 3.5% to $7.26.
Why is the NIB share price charging higher?
Investors have been bidding the NIB share price higher today after a leading broker suggested that Mondayâs weakness was a buying opportunity.
According to a note out of Citi, its analysts have upgraded NIB’s shares to a buy rating with a $7.85 price target.
Based on where its shares are currently trading, this implies potential upside of 8.1% for investors over the next 12 months.
Citi also now expects a fully franked 28 cents per share dividend in FY 2023, which equates to a 3.9% yield, boosting the total potential return to approximately 12%.
While Citi acknowledges that NIBâs first-half result was below expectations, it remains positive due to its above-system growth in the core ARHI segment.
What else are brokers saying?
Elsewhere, the team at Ord Minnett has also upgraded NIB’s shares. Albeit to a hold rating with a $7.00 price target.
Finally, over at Morgans, its analysts have retained their hold rating with a reduced price target of $7.55. It saw positives and negatives from the result. The broker commented:
We would summarise this result as a headline miss, with the lower than expected ARHI net margin (8.6% versus 10.6% in the pcp) raising some concerns about the potential speed of future profit normalisation in this business. But, we think those concerns shouldnât completely overshadow what was a sound 1H23 underlying business performance, highlighted by 9%-13% revenue and NPAT growth on the pcp respectively.
The post Is the NIB share price a bargain buy following Monday’s dive? appeared first on The Motley Fool Australia.
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More reading
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Motley Fool contributor James Mickleboro 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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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