ASX healthcare share Telix Pharmaceuticals Ltd (ASX: TLX) continued its strong run on Wednesday, rising 8% to $15.73.

Telix is now up 18% over the past month and 40% in 2026, although it remains down 36% over the past 12 months.

After a difficult year, investor sentiment has clearly improved. Here are three reasons the rally may still have further to run.

A powerful competitive moat

The ASX healthcare share operates in one of the most specialised areas of healthcare: radiopharmaceuticals.

These products combine radioactive isotopes with targeted therapies and diagnostics, helping doctors detect and treat diseases such as cancer with greater precision.

Importantly, this is not an industry that newcomers can easily enter.

Developing radiopharmaceuticals requires specialised expertise, manufacturing capabilities, regulatory approvals, and distribution networks that are expensive and difficult to replicate. Those barriers create a strong moat and help protect established players such as Telix from potential competitors.

As the market for precision medicine continues to expand, that competitive advantage could become increasingly valuable.

Momentum is building

The company has delivered a steady stream of positive developments in recent months.

In late February, Telix secured a key regulatory approval filing in Europe, marking an important step in expanding its commercial footprint beyond existing markets.

Momentum continued into April when the company announced that the US Food and Drug Administration had accepted its New Drug Application for TLX101-Px (Pixclara®). The acceptance represents a significant regulatory milestone and moves the product closer to potential commercialisation.

Telix also revealed a major collaboration with US biotechnology giant Regeneron Pharmaceuticals, strengthening confidence in its long-term growth strategy and pipeline potential.

Investors appear to be responding positively to the increasing number of catalysts emerging across the business.

Strong growth outlook

Telix’s financial performance continues to support the bullish investment case.

In April, the company reported first-quarter 2026 group revenue of US$230 million, representing an 11% increase on the previous quarter and a 23.7% rise compared to the prior corresponding period.

Management of the ASX healthcare share continues to guide to FY2026 revenue of US$950 million to US$970 million, supported by growth in its Precision Medicine business and contributions from its radiopharmacy operations.

The company also expects to invest between US$200 million and US$240 million in research and development this year.

That investment is helping advance multiple late-stage clinical programs and upcoming regulatory milestones across the pipeline.

Management also estimates its Precision Medicine and Therapeutics portfolio addresses a potential US$32 billion market opportunity in the United States alone, highlighting the scale of the growth runway ahead.

Analysts remain bullish

Market experts continue to see significant upside.

According to TradingView data, the majority of analysts covering the ASX healthcare share rate it as a strong buy. The most optimistic price target is $31.64, implying approximately 101% upside from current levels.

Morgans is also positive on the stock, with a $24.33 price target. That suggests upside of roughly 55%.

The broker recently noted that increasing consolidation across the healthcare sector could generate additional interest in Telix shares.

The post 3 reasons to buy this recovering ASX healthcare share appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Commonwealth Bank of Australia (ASX: CBA) and Wesfarmers Ltd (ASX: WES) are often seen as two of the highest-quality shares on the ASX.

I can understand why. Both have strong positions, long track records of success, and attract plenty of investor attention.

But quality does not stop there. There are other ASX shares with durable customer relationships, strong market positions, and the ability to compound over time.

If I were looking beyond CBA and Wesfarmers, these are three quality ASX shares I would consider buying.

Reece Ltd (ASX: REH)

Reece is one of those businesses that can look plain from a distance and more impressive up close.

The company supplies plumbing, bathroom, heating, ventilation, air conditioning, and waterworks products to trade customers. That may not sound glamorous, but the business sits inside an important part of the economy.

Plumbers and contractors need product availability, speed, reliability, and technical support. A delayed part can delay a job, upset a customer, and cost money. That gives a trusted supplier a meaningful role in the daily work of its customers.

I think that is one of Reece’s strengths. It has spent decades building relationships, branch networks, systems, and product knowledge. Those things are hard to copy quickly.

The US opportunity also makes the story more interesting. Reece has a much larger market to pursue, and success there could support growth for many years.

Housing cycles will still affect demand, and international expansion is rarely smooth. But I like businesses that can keep improving through better service, better systems, and deeper customer relationships.

Aristocrat Leisure Ltd (ASX: ALL)

Aristocrat is another quality ASX share I would consider.

The gaming company has built a global business around content, hardware, mathematics, design, and customer insight.

It is easy to think of gaming as purely a consumer business, but I see Aristocrat as a product development company with valuable intellectual property. It has to keep refreshing its content pipeline, improving cabinets, understanding player behaviour, and helping customers earn returns from their floor space.

It delivers on this by investing around 12% of revenue in R&D activities each year. And with Aristocrat consistently reporting a strong return on invested capital, this money isn’t being wasted.

The balance sheet also gives Aristocrat flexibility. A strong financial position can support investment, acquisitions, and capital returns when conditions allow.

Regulation and digital competition remain important risks. Still, I think Aristocrat’s track record, product engine, and global reach make it one of the more interesting quality businesses on the ASX.

Hub24 Ltd (ASX: HUB)

Hub24 is the wealth platform share I would include.

Australia’s wealth management industry is still changing. Advisers need better tools, clients expect clearer reporting, and portfolios are becoming more personalised.

Hub24 is one of the businesses helping that shift happen. Its platform gives advisers a way to manage administration, reporting, managed accounts, and investment portfolios more efficiently. That can make advice practices easier to run and help clients receive a better experience.

I like that Hub24 is connected to a large pool of Australian wealth. Superannuation, retirement planning, intergenerational wealth transfer, and demand for advice can all support long-term platform growth.

The business is exposed to market movements and competition, so valuation discipline is still important. But I think Hub24 has the type of usefulness that can support a high-quality growth story.

Foolish takeaway

CBA and Wesfarmers deserve their reputations, but they are not the only ASX shares with quality characteristics.

That is why I like looking at businesses such as Reece, Aristocrat, and Hub24. They operate in very different markets, yet each has built a position that would be difficult to recreate quickly.

For long-term investors, quality can show up in many forms. It can be a trade supplier with deep customer relationships, a gaming company with a strong product engine, or a wealth platform becoming more embedded in adviser workflows.

Those are the kinds of strengths I think are worth paying attention to beyond the most familiar ASX names.

The post 3 quality ASX shares I’d buy (that aren’t CBA or Wesfarmers) appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia, Hub24, and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24 and Wesfarmers. The Motley Fool Australia has recommended Hub24 and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Fortescue Ltd (ASX: FMG) shares have come under pressure recently.

The iron ore miner is trading around $19.27 at the time of writing, down from its 52-week high of $23.38. The share price has also fallen by around 12% over the past month.

That kind of pullback can make a high-profile share look tempting. Especially given that Fortescue has a long history of generating big cash flows when iron ore prices are strong.

But investors may need to look beyond the first-year numbers before deciding whether this is a bargain.

The valuation looks cheap at first

On near-term forecasts, Fortescue does look reasonably priced.

According to CommSec, consensus estimates point to earnings per share of $1.75 in FY26. Based on the current share price, that puts Fortescue on a price-to-earnings (P/E) ratio of about 11 times FY26 earnings.

That is not demanding on the surface.

The dividend also looks attractive. CommSec estimates dividends per share of $1.20 in FY26, implying a forward dividend yield of around 6.2%.

For income-focused investors, that number may stand out. A 6%-plus yield from a major ASX mining share can look appealing, especially for investors who believe iron ore prices can remain supportive.

But the real question is whether those numbers can last.

The forecasts get tougher

The issue is what happens after FY26.

CommSec consensus estimates suggest Fortescue’s earnings per share could fall to $1.44 in FY27 and $1.04 in FY28. At the current share price, that would lift the P/E ratio to around 13.4 times FY27 earnings and 18.5 times FY28 earnings.

That changes the picture.

The share may look cheap on FY26 earnings, but it looks much less cheap if profits fall as expected over the following two years.

The same applies to the dividend.

CommSec estimates dividends per share of 95.3 cents in FY27 and 67.7 cents in FY28. That implies yields of roughly 4.9% and 3.5%, respectively, based on the current share price.

A 6.2% forecast yield is attractive. A 3.5% yield from a highly cyclical iron ore miner is a different proposition.

That is why I think Fortescue has some value trap characteristics at current levels.

Why I’m cautious

Fortescue remains a very successful company. It has built a world-class iron ore business and has rewarded shareholders well over time.

But I think investors need to be careful when buying miners, mainly because the near-term yield looks high.

Iron ore earnings can move quickly. Prices, demand from China, shipping costs, currency movements, and operating costs can all affect profits. If earnings are already expected to decline, investors need to be comfortable with the possibility that dividends may also become less generous.

Fortescue is also spending heavily on future growth and energy ambitions. That may create opportunities, but it also adds another layer of execution risk.

For me, the cleaner mining exposure remains BHP Group Ltd (ASX: BHP).

BHP has broader commodity exposure, including copper, which I think has stronger long-term demand support from electrification, power grids, data centres, and energy infrastructure. It also has a larger and more diversified asset base.

Fortescue may still perform well if iron ore prices stay higher than the market expects. But if I were choosing between the two, I would prefer BHP shares.

Foolish Takeaway

Fortescue shares may look cheap after their recent fall, especially on FY26 earnings and dividend forecasts.

But the later-year estimates make me cautious. If earnings and dividends decline as expected, the valuation becomes less compelling, and the income appeal fades.

That does not make Fortescue a poor business. It does mean the current setup looks less attractive than the headline numbers suggest.

For investors wanting ASX mining exposure, I would avoid Fortescue shares for now and look more closely at BHP instead.

The post Are Fortescue shares a strong buy or a value trap? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.