Monash IVF shares have been under pressure lately. 

In April, it was revealed that an Australian woman had unknowingly given birth to a stranger's baby, after her fertility clinic accidentally implanted another woman's embryos into her. The clinic in question was Monash IVF. 

Monash IVF Group (ASX: MVF) shares fell 36% that day from $1.08 to $0.69. 

Since then, the stock has recovered 21%. At the time of writing, it trades at $0.835. 

Will this trend continue? Macquarie analysts believe so, with a 24 April Macquarie research report appearing very bullish on the stock. They have placed a $1.60 price target on it, suggesting almost 100% upside from here. Let's find out why.

Strong industry tailwinds

Macquarie views Monash IVF as well placed to capitalise on trends for the IVF industry. Monash IVF operates 13 permanent clinics across Australia.

Grand View Research expects the Australian in vitro fertilization market to grow at a CAGR of 7% from 2024 to 2030. Frozen Nondonor is expected to be the fastest-growing procedure type during the forecast period.

As reported by Macquarie, total IVF cycles grew 5.5% in Q3 FY25, driven by a 4.2% increase in fresh cycles and a 7.2% increase in frozen cycles.

Sticky customers

Despite the recent debacle, Macquarie expects Monash IVF to retain most of its market share. Specifically, due to the nature of the procedure,  most patients are likely to stay with the same doctors. However, the broker did acknowledge that a small portion of patients would likely switch to other providers.

Genetic testing

In November 2023, genetic testing was added to the Medicare Benefits Schedule (MBS), including reproductive carrier testing for cystic fibrosis, spinal muscular atrophy, and fragile X syndrome. These are the most inheritable genetic conditions and can reduce life expectancy. 

The testing is widely available, and pregnant individuals or those looking to become pregnant are eligible. 

According to Macquarie, as awareness increases, Monash IVF expects a significant portion of individuals considering pregnancy to be tested. Monash IVF expects around 1 in 200 reproductive couples to test positive on the three-gene panel. 

Since this change, around 157,000 tests have been performed. Macquarie expects a portion of these tests to be converted to IVF cycles, driving "significant incremental IVF cycles in the coming years."

Foolish Takeaway

Despite Monash IVF's recent debacle, Macquarie has tipped almost 100% upside for Monash IVF shares over the next 12 months. Although the company is down 44% from its 2024 peak, it's still up 44% over the past 5 years. It also offers a 6.11% fully franked dividend yield, allowing investors to receive passive income while they wait for their investment thesis to play out.