RBC Capital Markets has released a new report on the Australian-listed healthcare sector, upgrading five major stocks to an outperform rating in the process.

The broking house said healthcare had performed “generally much better than we had feared” across the August reporting season.

They added:

A combination of revenue beats and cost control drove earnings beats for most companies and we are now expecting positive earnings growth across the sector. While most of the sector has enjoyed a re-rating over the past 2 months, we believe a number of stocks could re-rate even further given their earnings growth outlook, appealing relative valuations and attractiveness of the healthcare sector in light of macroeconomic uncertainty.

As a result of this positivity, RBC has upgraded five stocks to an outperform rating and maintained that rating on one more.

Let’s see who they like.

CSL Ltd (ASX: CSL)

RBC said the recent result showed that CSL was regaining market share in the key immunoglobulin sector.

The broker said they now believed that “growth in the Behring business can offset the weak outlook in the Seqirus and Vifor business, and enable the company to deliver mid-single digit EPS growth for the next 3 years”.

While these growth rates were below historical levels, RBC said they were reasonable compared to other Australian large-cap stocks.

RBC has a price target of $213 on CSL shares.

Resmed Ltd (ASX: RMD)

The sleep apnoea device company delivered an in-line result, RBC said; however, there was more focus on capital management.

The broker is factoring in $1.5 billion in share buybacks per year out to FY31.

RBC has a price target of $262 on Resmed shares.

Ramsay Healthcare Ltd (ASX: RHC)

RBC said Ramsay was being well run, with its recent result showing good revenue growth and cost control.

They have valued the company on a demerger basis and believe such a strategy would create value.

RBC has a price target of $68 on Ramsay shares.

Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH)

RBC said this company’s trading update revealed a strong start to the year and an upgrade to FY27 guidance.

The broker added:

We expect FPH’s hospital revenues to continue growing in mid-to-high teens in FY27-FY29 which will enable the company to deliver double digit group revenue growth. FPH has the fastest growth profile across our coverage and we now believe FPH has the best price to earnings growth ratio across our coverage.

RBC has a price target of $52 on Fisher & Paykel shares.

Nanosonics Ltd (ASX: NAN)

RBC said Nanosonics had a mixed result with revenues missing expectations but earnings beating.

The broker said the Trophon business was growing and profitable, and they believed the share price was currently too bearish.

RBC has a price target of $3.75 on Nanosonics shares.

The broker also has an outperform rating on Integral Diagnostics Ltd (ASX: IDX) with a price target of $3.20.

The post CSL, Resmed, and more. See which ASX health stocks RBC Capital Markets has upgraded appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Nanosonics, and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended CSL and Nanosonics. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

At the end of August, Xero Ltd (ASX: XRO) shares were trading above $88. Today, you can pick them up 25% cheaper for $66.34. Xero shares have lost 17% in a month, 42% year to date, and collapsed 59% over 12 months.

For a tech stock once treated as an ASX growth darling, this is a stunning fall from grace.

A beating with no obvious trigger

Here’s the strange part: there hasn’t been a fresh earnings downgrade or a bombshell announcement behind this month’s slide of Xero shares. The company’s latest updates have mostly been routine substantial shareholder notices, and its FY26 result, released back in May, was actually pretty solid.

Revenue rose 31% to NZ$2.75 billion. Annualised monthly recurring revenue climbed 37% to NZ$3.27 billion. Subscribers grew 11% to 4.92 million. On the surface, this doesn’t look like a business in trouble.

So what’s spooking investors?

The market isn’t looking at the top line, it’s fixated on the risks underneath. Melio integration costs helped drag net profit down 27% to NZ$167.4 million, while gross margin slipped from 89% to 83.9%.

Add in broader questions about what AI could mean for software incumbents, plus lingering worries that elevated interest rates will keep punishing growth stocks, and you have a sell-off with plenty of narrative but not much hard news.

The growth case is still very much alive

Strip away the noise, and Xero added 506,000 customers over the year, lifting its global base to 4.92 million. Management isn’t backing off either — FY27 guidance points to revenue of NZ$3.62 billion to NZ$3.73 billion, implying roughly 30% growth at the midpoint.

Xero’s roots are in Australia and New Zealand, but the UK has grown into a genuine second pillar. Even so, the company reckons its total addressable market sits at around 100 million small and medium-sized businesses worldwide, a number that dwarfs its current customer base.

That’s where the US comes in. Xero finished FY26 with roughly 424,000 US customers, a fraction of what’s on the table in one of management’s three priority markets.

The Melio acquisition has strengthened Xero’s US proposition by letting businesses manage outgoing payments directly through the platform, and management pegs the US small-business payments opportunity alone at US$29 billion.

If Xero can even chip away at that, the current profit dip starts to look like the cost of buying future growth rather than a red flag.

What are brokers saying?

Opinion is split, but the tone is more optimistic than the share price suggests. Citi has a buy rating on Xero shares with a $113.60 target — nearly 70% above the current price. Morgan Stanley sees $130, and UBS is at $127.

Ord Minnett and Morgans sit more conservatively at $110 and $111. On the cautious end, RBC Capital and Jefferies have targets of $85 and $77 respectively. That’s still above where the stock trades today.

Foolish takeaway

Not a single broker target for Xero shares sits below the current share price. That’s a striking signal for a stock that’s lost more than half its value in a year. The growth numbers, the US opportunity, and now the broker consensus all point the same direction — even if the market hasn’t caught up yet.

The post Xero shares crashed 59%. What do brokers see next? appeared first on The Motley Fool Australia.

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• Down 54% in a year, are Xero shares now a buy, hold, or sell?

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

The S&P/ASX 200 Index (ASX: XJO) has suffered heavy losses over the past month. 

Since August 6th, Australia’s benchmark index has fallen more than 6%. 

Despite the pain for many investors’ portfolios, there are several strong value options. 

Yesterday, these three ASX shares hit 52-week lows:

• GQG Partners Inc (ASX: GQG)
• IVE Group Ltd (ASX: IGL)
• Generation Development Group Ltd (ASX: GDG). 

For value investors, these ASX shares could be enticing opportunities. 

GQG Partners

GQG Partners is a global boutique asset management company focused on active equity portfolios. It offers investment advisory and portfolio management services for investors across three continents.

In the last 12 months, its share price has fallen 38%. 

At the time of writing, it is trading at a 52-week low of $1.05. 

However, it now sits well below where many experts believe is fair value. 

Late last month, Morgans placed an accumulate rating and price target of $1.52. 

The near-term operating environment remains difficult for GQG; however, we think it’s hard not to see long-term value in the franchise at current levels, trading on ~7x FY1 PE.

This indicates an upside potential of almost 45%. 

While this capital gain upside is already enticing, this ASX stock also offers a strong dividend yield. 

At the time of writing, it offers a yield of over 10%, providing investors with passive income and potential capital gains. 

IVE Group

IVE provides communication solutions. Its services include creative services, personalised communications, print production, retail display, promotional merchandising, third-party sourcing, logistics and fulfilment, and managed solutions.

In the last 12 months, its share price has fallen 13%, and now sits at a 52-week low of $2.34. 

However, analysts’ forecasts via TradingView have an average one year target of $3.20. 

This indicates an upside potential of 36%. 

-It also recently posted some healthy full-year results, suggesting the underlying businesses remain sound. 

It also offers a dividend yield of over 7%. 

Generation Development Group

Generation Development Group is a diversified financial services company focused on investment and retirement products.

Its share price has fallen more than 57% in the last 12 months and is now hovering near a 52-week low of $2.92. 

The current price sits well below broker targets. 

TradingView analyst data has an average 12-month price target of $5.39 on this ASX stock. 

This indicates 84% upside from current levels. 

The post 3 ASX shares trading at 52-week lows that could be outstanding value plays  appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Generation Development Group and Gqg Partners. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.