NIB Holdings Limited (ASX: NHF) shares are pushing higher again on Monday.
At the time of writing, the private health insurer's shares are up almost 1% to $7.20.
This adds to the decent gains NIB's shares have made since the Medibank Private Ltd (ASX: MPL) cyber incident became public.
How much have NIB's shares risen since the incident?
First things first, the NIB share price actually sank 12% on the day that Medibank's hack was announced.
However, that was primarily due to the company raising $150 million to support its expansion into the NDIS market.
NIB raised the funds at $6.90 per new share, which represents an 8.1% discount to its last close price.
So, if we take this out of the equation, you could argue that the NIB share price fell 3.9% in response to news of Medibank's hack. Investors may have feared that the hackers could have infiltrated their systems as well. But this ultimately wasn't the case.
So, after accounting for the capital raising, the NIB share price has gained somewhere in the region of 4.5% since the incident. Whereas the Medibank share price has gone the other way and lost almost 20% of its value since the hack was announced.
That's a relative outperformance of approximately 24% for NIB's shares. I know which private health insurer I would've wanted in my portfolio!
Can its shares keep rising?
The good news for investors is that one leading broker believes the NIB share price can keep rising.
According to a note out of Morgans, its analysts have retained their add rating with an improved price target of $8.54. This implies potential upside of almost 19% for investors over the next 12 months.
Morgans was impressed with the company's strong start to FY 2023 and has been forced to upgrade its earnings estimates to reflect this. It explained:
We lift NHF FY23F/FY24F EPS by 11%/2% reflecting more favorable underlying growth trends than expected and also a lift to investment income assumptions. Our PT rises marginally to A$8.54 (previously A$8.27).
Overall, the broker believes NIB's outlook is positive and its shares are trading at an attractive level. It concludes:
NHF is a well-run company, and the near-term operating environment remains favourable for its key Australian Residential Health Insurance business (assisted by a benign claims environment). Covid-19 headwinds that were affecting some of NIB's other businesses, e.g. IIHI and Travel etc. also appear to be easing. With NIB trading at a >10% discount to our target price, we maintain our ADD call.
