ASX healthcare shares have been a mixed bag in 2022. The industry was flourishing during the later part of the last calendar year but took a turn as early as November.
The downside continued along with the broader sell-off in equities. However, unlike most other industries, it has failed to reclaim a good portion of the losses.
The S&P/ASX 200 Health Care Index (ASX: XHJ) is down more than 10% this year to date and is sitting around the same over the past 12 months.
What are the projections?
Healthcare is seen as a ‘defensive‘ industry that is largely insensitive to the business cycle. With this in mind, the current and forward-looking economic climate are of interest to those looking at ASX healthcare shares.
The industry trades on a price-to-earnings (P/E) ratio of 30.09 times at the time of writing, and has delivered a trailing dividend yield of 1.62%.
Some of the largest players, such as CSL Limited (ASX: CSL), Resmed Inc (ASX: RMD), and Sonic Healthcare Limited (ASX: SHL), reside within this portion of the market.
Each of these dominant names has numerous bullish price targets that point to strength in the industry across a diverse array of services.
CSL is rated a buy from 13 out of 16 brokers covering the share, with a $320 consensus price target (all data sourced from Refinitiv Eikon). The CSL share price closed on Friday at $280.43.
Meanwhile, Resmed is also tipped as a buy from nine out of 14 analysts, with a consensus valuation of $36.10. Resmed shares ended Friday’s session trading for $34.14 apiece.
Sonic is rated a buy from six out of the 15 analysts covering it, with a $35.86 price target assigned. The Sonic share price is $30.55 as of Friday’s close.
Noteworthy is that each consensus price target is priced above the current market value of each share.
In addition, some of the largest ASX healthcare shares are posted in the table below, with their respective fundamentals. All figures are in millions of dollars (except earnings per share and percentage).
| Name | Revenue [$million] | EBITDA | Net Income | EPS | Free Cash Flow | ROE (%) |
| S&P/ASX 200 Health Care Index (ASX: XHJ) | 1,992.3 | 514.4 | 281.6 | $ 0.88 | 98.8 | 16.3 |
| CSL Limited (ASX: CSL) | 15,304.9 | 5534.7 | 3267.2 | $ 6.97 | 740.2 | 19.6 |
| Resmed Inc (ASX: RMD) | 5,185.0 | 1683.5 | 1129.5 | $ 7.68 | 779.1 | 25.0 |
| Sonic Healthcare Limited (ASX: SHL) | 9,340.2 | 2835.8 | 1460.6 | $ 3.02 | 1356.9 | 21.4 |
| Ramsay Health Care Limited (ASX: RHC) | 13,210.2 | 1334.1 | 274.0 | $ 1.16 | 229.3 | 6.9 |
| Cochlear Limited (ASX: COH) | 1,648.3 | 471.2 | 289.1 | $ 4.40 | 95.1 | 17.1 |
| Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH) | 15,58.9 | 557.7 | 349.4 | $ 0.60 | 72.5 | 23.6 |
| Pro Medicus Limited (ASX: PME) | 94.1 | 69.3 | 44.4 | $ 0.42 | 23.9 | 48.5 |
| Ansell Limited (ASX: ANN) | 2,828.7 | 470.9 | 230.0 | $ 1.79 | 102.6 | 10.3 |
| Healius Ltd (ASX: HLS) | 2,336.2 | 766.9 | 307.9 | $ 0.52 | 380.9 | 15.6 |
| Telix Pharmaceuticals Ltd (ASX: TLS) | 7.6 | -71.8 | -80.5 | $ (0.29) | -76.7 | -198.4 |
| Imugene Limited (ASX: IMU) | 0.0 | -35.3 | -37.9 | $ (0.01) | -35.7 | -37.2 |
| Nanosonics Ltd (ASX: NAN) | 120.3 | 7.6 | 3.7 | $ 0.01 | 2.5 | 2.7 |
With that, we can observe some names from the above list with projected earnings over the next two years in the table below as well.
| EPS | ||||
| Name | Prev | This year | FY24 | FY25 |
| S&P/ASX 200 Health Care (GIC) | $ 1.32 | $ 0.86 | $ 1.18 | $ 1.56 |
| Resmed Inc | $ 4.32 | $ 7.68 | $ 8.47 | $ 9.46 |
| CSL Ltd | $ 6.94 | $ 6.97 | $ 8.56 | $ 10.40 |
| Cochlear Ltd | $ 4.97 | $ 4.40 | $ 5.31 | $ 6.65 |
| Sonic Healthcare Ltd | $ 2.73 | $ 3.02 | $ 1.72 | $ 1.56 |
| Ansell Ltd | $ 2.53 | $ 1.79 | $ 2.23 | $ 2.09 |
| Ramsay Health Care Ltd | $ 1.80 | $ 1.13 | $ 2.98 | $ 3.13 |
| Fisher & Paykel Healthcare Corporation Ltd | $ 0.83 | $ 0.60 | $ 0.64 | $ 0.74 |
| Healius Ltd | $ 0.11 | $ 0.50 | $ 0.21 | $ 0.22 |
| Pro Medicus Ltd | $ 0.29 | $ 0.42 | $ 0.54 | $ 0.65 |
| Nanosonics Ltd | $ 0.03 | $ 0.01 | $ 0.09 | — |
| Imugene Ltd | $ (0.00) | $ (0.01) | $ (0.01) | $ (0.01) |
| Telix Pharmaceuticals Ltd | $ (0.17) | $ (0.29) | $ (0.30) | $ (0.03) |
The post What’s the outlook for ASX healthcare shares in Q2? appeared first on The Motley Fool Australia.
More reading
- CSL shares ‘still not fully appreciated’: Wilsons
- ResMed share price drops: Is this a buying opportunity?
- If you must buy now, here are the 3 ASX shares to grab: expert
- CSL share price lower despite FY23 guidance update
- 3 excellent ASX growth shares analysts rate as buys
Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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