A new report from Ord Minnett has reiterated a strong outlook for Medibank Private Ltd (ASX: MPL). The report came following its recent financial results. 

Australia’s largest insurance provider released full-year results on August 20. 

Key results included underlying net profit after tax rising 2.9% to $636.8 million. Additionally, MediBank declared a full-year dividend increase of 6.7% to 19.2 cents per share, fully franked.

The Motley Fool’s coverage of the results can be found here.

What was Ord Minnett’s view on the results?

In yesterday’s report, Ord Minnett said FY26 revenue and earnings from Medibank were in line with expectations.

However, the lack of policyholder growth in the second-half (2H26) was slightly disappointing. 

Revenues increased 6% to $9.1 billion. Underlying net profit after tax (NPAT) of $637 million was up 3% on FY25. 

It also noted the company declared a fully franked final dividend of 10.9 cents per share (cps), taking the total FY26 dividend to 19.2 cps, an increase of 7% from FY25.

Focus on policyholders

Ord Minnett also noted the net number of policyholders grew by 1.1% in the year, with Medibank policyholders up 0.6% and ahm up 2.4%, while non-resident policy units fell 2.3%. 

In the second-half (2H26), policyholder growth slowed to 0.2%, with the slowdown blamed on cost-of-living pressures, increased switching by customers, and rising competition in the June quarter as some competitors adopted aggressive growth tactics. 

While policyholder growth was weak in the 2H26, it is not too dissimilar to growth rates in previous corresponding half-years and is typical of seasonal churn in the industry. Further, the policyholder growth delivered in FY26, should not trigger material downgrades, given consensus estimates ahead of the result had a similar level of policyholder growth, of 1.3% for FY27.

Healthy upside intact for MediBank

Medibank Private shares have dipped over the last few weeks, closing trading yesterday at $4.84. 

In yesterday’s report, Ord Minnett retained its buy recommendation and $5.10 price target on MediBank Private shares thanks largely to its defensive profile. 

We reduce our EPS by 1.5–2.0% per annum in FY27–29 driven by lower policyholder growth and higher cyber litigation costs, partially offset by higher investment income. 

Our target price is unchanged at $5.10 as the earnings reductions are offset by an increase to the valuation multiple, following a rise in the price-earnings multiple of the market. 

We keep the Buy recommendation viewing MPL as a relatively defensive option for the next 12 months, with circa 5-10% annual EPS growth on our forecasts.

From yesterday’s closing price, this target indicates just over 5% upside. 

The post Why now is the time to buy MediBank Private shares: Expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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 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 Scott Phillips.

Superannuation is a fantastic tool to help Australians build wealth to support themselves in retirement.

Your super provides the benefit of concessional tax rates, and compound growth.

It can also act as a tool to generate a passive income once you transition to the pension phase.

But how much superannuation do you need to accumulate to target your ideal passive income amount?

Let’s investigate, using a $90,000 annual passive income as an example.

How much do I need in my superannuation to get $90,000 per year in passive income?

To calculate the balance you need, you need to divide your ideal annual passive income by the dividend yield of your portfolio.

For example, $90,000 ÷ 3% = $3 million (that’s the amount you’ll need in your superannuation to earn the $90,000 per year).

A $3 million superannuation portfolio isn’t achievable for many Australians. But the good news is that as your dividend yield increases, the superannuation balance needed to earn the same passive income decreases. 

For example, a portfolio with a dividend yield of around 6% only needs to be half the size of one with a dividend yield of around 3% to generate the same level of passive income.

What balance do I need if my portfolio yields 4%, 5% or 6%?

We already know what portfolio size you’d need to earn $90,000 per year off a 3% yielding account.

But if your overall portfolio has a slightly higher dividend yield of around 4%, you’ll need a balance of around $2.25 million to earn the same $90,000 per year in passive income.

If the yield of your portfolio is higher still, at around 5% for example, your balance would need to be closer to $1.8 million to earn the same dividend income.

For a 6% yielding portfolio, you’d need a superannuation balance closer to $1.5 million to earn the same amount again.

And so on…

You’d still earn $90,000 per year in passive income from each of these superannuation balance sizes.

Diversification is key

It can be tempting to go for the highest-yielding portfolio so you don’t need as much in your superannuation.

But that would be a risky move. The higher the yield, generally the more risk associated with that stock.

Also note, if you want a portfolio yielding around 5% or even higher, it doesn’t mean that every investment in that superannuation portfolio has to yield that level. It can be a combination that yields 5% overall.

And remember, you don’t need to invest the whole sum in one go. Start with a monthly investment and let compound growth do some of the hard work for you.

I’d look at splitting my superannuation portfolio into investments across several different yielding assets, preferably across different sectors.

This diversification strategy means that if one asset drops in value, its performance can be offset by other ASX shares, leading to a more consistent overall result.

I’m aiming for a 5% yielding superannuation portfolio, what ASX shares can I invest in?

To earn a $90,000 passive income off a 5% yielding portfolio, you’d need around $1.8 million saved.

There are plenty of good-quality ASX shares around this level. But here are my top picks.

Defensive shares like Telstra Group Ltd (ASX: TLS), Transurban Group (ASX: TCL), AGL Energy Ltd (ASX: AGL) or APA Group (ASX: APA) are a solid choice for income-seeking investors. These all yield around the 5% level, at the time of writing.

Non-discretionary ASX consumer staples stocks are also naturally defensive, but many of them yield slightly less. Supermarket giants like Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) can generate stable cash flow across all phases of the economic cycle. This translates to consistent dividends for shareholders. These shares pay around 3%, at the time of writing.

Elsewhere, ASX shares like Amcor Ltd (ASX: AMC), Ebos Group Ltd (ASX: EBO) and Harvey Norman Holdings Ltd (ASX: HVN) are popular options for income-seeking investors. 

The post How much superannuation do I need to earn $90,000 per year in passive income? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Amcor Plc, Apa Group, Harvey Norman, Telstra Group, and Transurban Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

CSL Ltd (ASX: CSL) shares have staged a remarkable comeback, surging 35% in a month and 87% from their 52-week low in June.

After a bruising year, however, investors now face a critical question: has CSL’s turnaround finally arrived, or has the rebound run too far?

More importantly, where do brokers see the CSL share price heading over the next 12 months?

Why has the biotech stock soared?

The catalyst was CSL’s FY26 result. On the surface, it looked ugly, with the $80 billion biotech company reporting a US$2.6 billion net loss after tax.

But investors quickly looked beyond the headline number. The loss included US$7.1 billion of pre-tax impairments and US$799 million of restructuring costs, much of which was non-cash. Most of the impairments related to CSL Vifor intangibles and under-utilised property, plant and equipment.

Investors in CSL shares had already received a warning in May, when CSL flagged around US$5 billion of impairments and cut its FY26 guidance. Excluding the exceptional items, underlying NPATA was US$3.1 billion, down just 2%. Revenue fell 1% to US$15.8 billion but still beat analyst expectations.

For investors, the result therefore represented something potentially more valuable than headline profit: a reset year, a cleaner balance sheet and a better-than-feared outlook.

CSL Behring remains the standout. Its plasma division generated US$11.4 billion of revenue, while immunoglobulin revenue held steady at US$6.2 billion. CSL Vifor grew revenue 3% to US$2.4 billion, although Seqirus remained under pressure, with revenue falling 8% to US$2 billion.

Could the FY27 forecast send CSL shares higher?

The bull case for CSL shares centres on FY27. CSL expects underlying NPAT to grow approximately 5%, ahead of consensus expectations of around 2%. Behring is forecast to deliver mid-single-digit growth, with immunoglobulins expected to grow at a mid-to-high single-digit rate.

The major challenge remains Vifor, where revenue is expected to plunge about 25% as iron generics enter the market.

For CSL shares, the recovery story is clearly gaining momentum. The question now is whether improving fundamentals can justify the renewed optimism already priced into the stock.

Where do brokers see CSL shares going?

Not every broker believes the recovery is firmly established. Of 18 analysts tracked on TradingView, 10 rate CSL shares a hold, while eight have a buy or strong-buy rating. The average 12-month price target is $164.69, below the current share price of around $171.45.

However, the forecasts vary dramatically. The most bullish target is $205.22, implying another 20% upside, while the lowest is just $132.25, pointing to more than 23% downside.

Macquarie is among the most bearish, with a neutral rating and target of just over $133. UBS is considerably more optimistic at $181, while Morgan Stanley has a $172 target.

Bell Potter has retained its hold rating but recently increased its target from $120 to $150.

The takeaway? CSL’s turnaround is gathering momentum, but the stock’s spectacular rebound means investors are now paying for a recovery that still needs to prove itself.

The post Where will CSL shares be in 12 months? Brokers weigh in appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.