The turnaround has been sharp.

The S&P/ASX 200 Health Care Index (ASX: XHJ) hit a nine-year low on 3 June 2026, having fallen 39% over the prior twelve months.

Since then, the index has risen by 21% in just one month, compared with a 0.7% rise in the broader S&P/ASX 200 (ASX: XJO) index over the same period.

CSL Ltd (ASX: CSL), Cochlear Ltd (ASX: COH), and ResMed Inc (ASX: RMD) are all up.

The question is whether this recovery is real, or whether the sector has simply bounced from deeply oversold levels.

What drove the selloff in the first place

Understanding the recovery requires understanding what caused the fall.

Healthcare was the worst-performing sector of all eleven ASX 200 market sectors in FY26.

The sector was hit by a combination of factors specific to individual companies and broader macro forces.

A stronger Australian dollar eroded the offshore profits of CSL, which generates most of its revenue in the United States. Rising interest rates weighed on the valuations of high-multiple growth stocks across the sector. Earnings downgrades at CSL and Cochlear removed the premium earnings trajectory the sector had traded on for years. And a rotation toward energy and resources stocks pulled capital away from healthcare regardless of individual company fundamentals.

CSL: the most important recovery to watch

CSL is up 32% since 3 June, but remains down close to 50% over the past twelve months.

The FY26 result, due on 19 August 2026, will be the most important test of whether the recovery has earnings support or is simply a valuation rebound.

Management has pointed to improving Behring division revenue in the second half of FY26 as the key catalyst.

Morgans retains a buy rating on CSL with a price target of $147.59. However, the broker acknowledges that a sustained recovery in sentiment may take several quarters to fully materialise as the market waits for proof in the numbers.

ResMed: the most compelling valuation story

ResMed is up 18% since 3 June but remains at its lowest valuation in over a decade.

Morgans has retained its buy rating on ResMed with a price target of $41.72. The broker noted that the stock has de-rated to just 16 times forward earnings despite the market continuing to forecast double-digit earnings per share growth.

Morgans points out that while GLP-1 therapy risks exist, current industry data and operational performance continue to support the long-term investment case.

Q2 FY26 showed ResMed revenue rising 11% to $1.42 billion with net income up 14%, confirming the underlying business is growing strongly despite the macro noise.

Cochlear: the longest road back

Cochlear is up 31% since 3 June but remains the most deeply impaired of the three. Cochlear shares are still down approximately 52% year to date and 58% over twelve months.

The majority of brokers covering the stock still carry a hold rating, with the consensus price target of $137.10 implying only modest further upside at current levels.

Bell Potter’s Christopher Watt said that while near-term trading challenges persist, the long-term opportunity remains compelling. The broker added that until there is clearer evidence that volumes are stabilising, a more balanced stance is appropriate.

Is the recovery sustainable for ASX healthcare shares?

The honest answer is that the recovery has largely been driven by sector rotation rather than a genuine improvement in underlying fundamentals.

That matters because sector rotation can reverse just as quickly as it appears.

The August reporting season will be the real test.

CSL’s FY26 numbers, due 19 August, will either confirm that the Behring margin recovery is tracking as management described or force another round of earnings estimate cuts.

For investors who believe the long-term investment cases for CSL, ResMed, and Cochlear are intact, the current entry points, even after a 21% sector rally, look more attractive than anything available in the past five years.

For investors looking for a quick trade, the easy part of the recovery may already be done.

Foolish takeaway for ASX healthcare shares

ASX healthcare shares surged 21% in a month from a nine-year low.

CSL, ResMed, and Cochlear have all participated meaningfully in that recovery.

Whether the rally continues depends on the August reporting season delivering the earnings support that sector rotation alone cannot provide indefinitely.

The post ASX healthcare shares have jumped 21% since June. Can the recovery continue? appeared first on The Motley Fool Australia.

More reading

• After losing half their value, can CSL shares reclaim $275?
• 3 ASX shares down at least 50% in FY26
• Top brokers name 3 ASX shares to buy next week
• Healthcare shares lead the ASX 200 again as sector rotation gathers pace
• Buy, hold, sell: Objective Corp, ResMed, and South32 shares

Motley Fool contributor Mark Verhoeven 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, Cochlear, and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended CSL and Cochlear. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX shares Echo IQ Ltd (ASX: EIQ) and Sunrise Energy Metals Ltd (ASX: SRL) have enjoyed big returns in 2026.

These ASX shares have risen by over 500% and 125% respectively since the start of the year. 

This huge rise is difficult to ignore for growth investors, and experts have provided updated commentary on these soaring stocks. 

Here is what brokers are saying. 

Volatility expected for Echo IQ

A new report from Bell Potter has included updated guidance on Echo IQ shares. 

It is an ASX-listed medical technology company utilising proprietary, AI-driven software (the EchoSolv platform) to analyse echocardiographic data to aid clinicians in diagnosing serious conditions like aortic stenosis (AS) and left ventricular dysfunction more accurately.

Its share price has stormed higher in 2026 on the back of key US deals and AI development.

A note out of Bell Potter indicates it could experience some volatility moving forward. 

Looking on the positive side, the broker said Echo IQ is making good progress by developing new products and securing long-term funding.

A major positive was partnering with Pro Medicus Ltd (ASX: PME), which gives credibility to its EchoSolv platform.

However, winning new hospital and radiology customers in the US will take time – likely years, not months.

Price target increased 

Bell Potter has increased its price target to $1.75 per share (from $1.65).

The higher valuation reflects the stronger financial position after the capital raise.

However, the broker expects the share price to remain volatile because:

• Revenue growth is expected to be modest over the next two years.
• The company will continue to spend significant cash.
• The share price will likely move based on announcements of new customer wins.

The broker now has a speculative hold recommendation, and based on the updated price target, sees limited share price upside in the next 12 months. 

Last week, these ASX shares closed trading at $1.65. 

Sunrise Metals could keep rising 

Sunrise Metals shares have also rocketed higher in 2026. 

The company is focused on the development and application of ion-exchange technology for extracting valuable metals in the mining industry and for purifying and recycling wastewater.

Positive development updates have helped swing momentum to the positive side for these ASX materials shares. 

According to analyst views via TradingView, this could continue. 

These ASX shares closed last week trading at $17.75 per share. 

The average analyst forecast indicates Sunrise Metals shares could hit $20.00 per share in the next 12 months. 

From last week’s closing price, this indicates a further 12% upside. 

 

 

The post What are experts saying about these red hot ASX shares? appeared first on The Motley Fool Australia.

More reading

• Healthcare shares lead the ASX 200 again as sector rotation gathers pace
• 10 of the best ASX shares to buy in FY 2027
• Up more than 550% in a year, why is this ASX biotech charging even higher?
• Buy, hold, sell: Collins Foods, Karoon Energy, and Pro Medicus shares
• Top 3 ASX healthcare stocks to buy today

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

CSL Ltd (ASX: CSL) shares have endured a brutal fall over the past year, with investors watching nearly a decade of gains disappear.

The healthcare giant shares are now trading around levels last seen in March 2017, effectively wiping out nine years of share price appreciation. However, there are early signs sentiment may be improving, with CSL shares rallying an impressive 34% over the past month.

Even after that rebound, the stock remains down around 50% over the past 12 months. That raises the big question for investors: can CSL shares eventually recover to last year’s highs above $275?

What do analysts think?

Broker sentiment remains divided. According to TradingView data, 18 analysts have updated their ratings on CSL shares over the past three months. Eight recommend buying the stock or rate it a strong buy, while the remaining 10 have a hold recommendation.

Despite the mixed views, the average price target sits at $141.53, implying upside of around 16% from current levels. The most bullish analyst has a target price of $201.07, suggesting potential upside of roughly 65%.

Among the more optimistic brokers is Morgans, which recently retained its Buy rating and a price target of $147.59. That implies approximately 20% upside, with the broker continuing to back the company’s long-term fundamentals.

Macquarie Group Ltd (ASX: MQG), however, remains more cautious. The broker has a neutral rating and a price target of $114, reflecting uncertainty across CSL’s core plasma and albumin businesses, alongside ongoing competitive pressures.

A quality business facing headwinds

Not long ago, CSL shares were widely regarded as one of the ASX’s most dependable compounders. The company built its reputation on consistent earnings growth, global leadership in plasma-derived therapies, and a long history of delivering strong returns for patient shareholders.

That perception has changed dramatically over the past year. A series of earnings downgrades, leadership changes, and roughly US$5 billion in non-cash impairments linked to the CSL Vifor acquisition have significantly dented investor confidence. Combined, these factors have contributed to the stock’s decline of more than 50%.

Yet despite the sharp sell-off, the underlying business remains highly defensive. CSL is still the world’s second-largest plasma-derived therapies company, operating in an industry with high barriers to entry, stringent regulation, and complex global supply chains. Those competitive advantages are difficult for rivals to replicate.

Can CSL shares recover?

CSL’s latest guidance suggests the business continues to grow, albeit at a slower pace than investors had become accustomed to.

Management expects FY26 revenue of around US$15.2 billion and underlying net profit after tax and amortisation (NPATA) of approximately US$3.1 billion on a constant currency basis.

The biggest challenge remains the US immunoglobulin business within CSL Behring.

While demand continues to grow at a healthy mid-to-high single-digit rate, supply constraints and pricing dynamics have prevented the company from fully capitalising on that demand. That mismatch has weighed on margins and earnings momentum, helping explain why investor sentiment has remained subdued.

Whether CSL shares can eventually reclaim their previous highs will likely depend on management’s ability to improve execution, restore earnings growth, and rebuild market confidence.

For long-term investors, the recent rebound may be encouraging. But with analysts still split and operational challenges yet to fully ease, the path back to $275 is unlikely to be a straight line.

The post After losing half their value, can CSL shares reclaim $275? appeared first on The Motley Fool Australia.

More reading

• ASX healthcare shares have jumped 21% since June. Can the recovery continue?
• 3 ASX shares down at least 50% in FY26
• Healthcare shares lead the ASX 200 again as sector rotation gathers pace
• How much do I need in superannuation to receive $5,500 per month in passive income?
• 10 of the best ASX shares to buy in FY 2027

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 CSL and Macquarie Group. The Motley Fool Australia has recommended CSL and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.