Medibank Private Ltd (ASX: MPL) shares have been quiet performers on the S&P/ASX 200 Index (ASX: XJO) over 2025 so far. Medibank shares started the year at $3.79 each. Today, those same shares are asking $4.91 each at the time of writing.
That's up 0.2% for the day thus far, and up a whopping 29.55% year to date. Over the same period, the broader ASX 200 Index has risen by a far tamer 4.3%. So, Medibank shares have been clear market beaters in 2025.
Much of this ASX 200 private health insurance stock's gains this year appear to have been spurred by improving fundamentals.
Back in February, Medibank reported its latest half-year results. As we covered at the time, the company unveiled a 6.1% jump in revenues for the six months to 31 December 2024 to $4.27 billion. Operating profits rose by 12.5% to $386.8 million, while underlying net profits after tax leapt 13.8% to $298.7 million. This enabled Medibank to increase its interim dividend by 8.3% to 7.8 cents per share.
As a result of these earnings, Medibank shares surged by almost 10% on the day they were revealed. The company has been trending higher ever since, leading to that healthy year-to-date gain we just discussed.
Today, at that $4.91 share price, Medibank is trading on a price-to-earnings (P/E) ratio of 27.55, with a dividend yield of 3.51%.
But one ASX expert thinks investors may have gotten a little carried away.
Macquarie sees trouble ahead for Medibank Private shares
In a report to clients, brokers at Macquarie gave Medibank shares a 'neutral' rating, alongside a 12-month share price target of $4.25. If realised, that would see Medibank stock lose more than 13% of its value over the coming year.
To be fair, Macquarie does predict Medibank will be able to grow its revenues, earnings, and profits over the 2026 and 2027 financial years after a predicted stumble in FY2025. It is currently pencilling in an underlying earnings per share (EPS) metric of 21 cents for FY25, 21.4 cents for FY26, and 22.9 cents for FY27.However, the broker does not anticipate that this growth will be enough to support the current earnings multiple on Medibank shares.
The ASX broker also notes that Medibank faces significant uncertainty going forward. This stems mainly from regulatory risks in the heavily regulated private health insurance market, as well as from uncertain global economic conditions.
Only time will tell if Macquarie is on the money here. Let's see how Medibank shares fare over the rest of 2025 and beyond.
