Brokers say these defensive ASX 200 healthcare shares are buys

Given how defensive the healthcare sector is, many investors are turning to this side of the market because of the uncertain economic environment.

This has seen the S&P/ASX 200 Health Care index rise almost 8% year to date, which is approximately double the return of the benchmark ASX 200 index.

With that in mind, listed below are two ASX 200 healthcare shares that could be good options if you’re looking for exposure to the sector. Here’s what brokers are saying about them:

Cochlear Limited (ASX: COH)

The first ASX 200 healthcare share to look at is hearing solutions company, Cochlear.

Goldman Sachs thinks it could be a top option in the sector right now. This is due to its belief that improving trading conditions could see Cochlear outperform its guidance in FY 2023.

The broker currently has a buy rating and $265.00 price target on its shares. It commented:

We believe Cochlear screens well on these fundamental factors, and largely avoids the margin uncertainties prevalent across other verticals. We expect a sequential improvement in momentum through 2H23 (further elective volume improvement and new processor launch momentum, potentially tempered by some moderation in Acoustics). We forecast above guidance in FY23E (GSe: $306m vs. $290-305m) and believe shares will now be further supported by a newly announced multi-year buyback program (GSe: $75m/year).

ResMed Inc. (ASX: RMD)

Another ASX 200 healthcare share that has been named as a buy is ResMed.

Morgans is a big fan of the sleep treatment company. It believes ResMed is well-positioned for growth in both the near and long term. The latter will be supported by its growing software-as-a-service (SaaS) business, which is leveraged to the out of hospital care trend.

Morgans has a buy rating and $37.24 price target on the company’s shares. It said:

We continue to believe the overall fundamentals remain sound and the company is well positioned, with margin headwinds expected to abate slowly. […] We view RMD as increasingly well positioned as a leading SaaS provider of out of hospital care, with strong underlying sales momentum (+7%) expected to continue, and integration of German-based Medifox Dan (only 6 weeks in 2Q; EPS neutral) offering end-to-end software for nursing and HME customers in Germany.

The post Brokers say these defensive ASX 200 healthcare shares are buys appeared first on The Motley Fool Australia.

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More reading

• Why this ASX 200 ‘stable stock’ is poised to outperform: Goldman Sachs
• Build your portfolio around these ASX 200 blue chip shares: brokers
• My top 5 ASX shares to buy and hold forever in anticipation of the bull market
• The broker community’s 3 best ASX 200 shares to buy for 2023
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Motley Fool contributor James Mickleboro 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 Cochlear and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Cochlear. 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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