The NIB Holdings Limited (ASX: NHF) share price has rocketed 157% over the past 5 years, but might have got ahead of itself if the analysts at Goldman Sachs are on the money.
NIB got a surprise boost in May 2019 after the Liberal party won a shock Federal election victory that some investors think might mean more people take up private healthcare policies due to less generous Medicare funding rebates and services under a Liberal government.
Goldman Sachs warns though that it still expects government premium increases to be no more than 3% annually going forward, which Goldman's notes will impact NIB's important operating margins.
Goldman's also claims that as at July 15 NIB shares were trading on 25x its forecast price-to-earnings ratio, which is its "highest ever point over the past decade".
Goldman's acknowledges that it's a little more bearish than consensus in its earnings per share forecasts to come up with a $5.63 12-month share price target to suggest NIB shares at $7.90 today could have a weak 12 months.
Elsewhere shares in private healthcare market leader Medibank Private Ltd (ASX: MPL) trade for $3.65.
