The Medibank Private Ltd (ASX: MPL) share price has had a sluggish start to the year.
Medibank shares have fallen 11% since 4 January, the first trading day of the year. In today’s trade, the share fell 0.33% to $3.05.
Let’s take a look at what has been impacting the Medibank share price.
What’s going on with Medibank?
The private health insurance giant’s shares have had a tough start to the year after gaining 11% in 2021.
Medibank was hit with a downgrade recommendation from the team at JP Morgan earlier this year. The broker recommended the share price as a ‘sell’ and reduced the price target from $3.30 to $3.
The company also faced calls to pass more COVID savings back to members from the Private Hospital Association chief executive Michael Ross.
The Medibank share price fell 14% between market close on 7 January and 31 January alone. Elective surgery bans in Victoria and NSW amid the Omicron variant wave could have impacted the company’s shares.
On 25 February, the Medibank share price slipped 4% on the back of the company’s H1 FY22 results. Net profit after tax (NPAT) dropped 2.7% to $220.2 million. The company reported elective surgery restrictions during the COVID-19 pandemic had taken a toll.
Commenting on the elective surgery bans, CEO David Koczkar said:
We’ve always committed to return all permanent net claims savings due to COVID. And while we are pleased to be able to support our customers throughout the pandemic, now is the right time for governments to minimise future use of restrictions to elective surgery.
In late February, Medibank appointed Kathryn Fagg AO and Peter Everingham to the board as non-executive directors. Commenting on the appointment, chairman Mike Wilkins said:
As our company continues to grow, and as we continue to increase our focus on delivering for our customers, we are pleased to be able to appoint two new directors with such extensive experience and a proven track record.
These new non-executive directors will commence their roles on 31 March.
In better news for the company, Broker Credit Suisse has recently put a $3.50 price target on the Medibank share. This is nearly 15% more than the current share price.
Medibank declared a franked interim dividend of 6.1 cents per share
Medibank share price snapshot
The Medibank share price has climbed nearly 5% in the past 12 months, but it has shed 6% in the past month.
For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has leapt 9% in the past 52 weeks.
Medibank has a market capitalisation of about $8.4 billion based on its current share price.
The post Why has the Medibank (ASX:MPL) share price lost 11% since early January? appeared first on The Motley Fool Australia.
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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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