It's been a pretty great week for Medibank Private Limited (ASX:MPL) shareholders, with its shares surging 10% to AU$4.35 in the week since its latest half-yearly results. It looks like a credible result overall - although revenues of AU$4.3b were in line with what the analysts predicted, Medibank Private surprised by delivering a statutory profit of AU$0.12 per share, a notable 17% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Medibank Private

Following the latest results, Medibank Private's ten analysts are now forecasting revenues of AU$8.60b in 2025. This would be a satisfactory 3.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 27% to AU$0.23. In the lead-up to this report, the analysts had been modelling revenues of AU$8.61b and earnings per share (EPS) of AU$0.22 in 2025. So the consensus seems to have become somewhat more optimistic on Medibank Private's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 8.5% to AU$4.48. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Medibank Private, with the most bullish analyst valuing it at AU$4.90 and the most bearish at AU$4.00 per share. This is a very narrow spread of estimates, implying either that Medibank Private is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Medibank Private's growth to accelerate, with the forecast 6.5% annualised growth to the end of 2025 ranking favourably alongside historical growth of 4.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 0.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Medibank Private is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Medibank Private's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Medibank Private going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Medibank Private you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.