ASX 200 healthcare shares are on a roll, up by a staggering 42% since the sector began a rapid rebound, after a horror year, on 3 June.

The S&P/ASX 200 Health Care Index (ASX: XHJ) reached a 9-year low on 3 June following a 39% 12-month pummelling.

Healthcare shares tanked due to many industry headwinds, including the FX rate for companies reporting in US dollars; cost of living pressures; higher shipping and labour costs, and US regulatory uncertainty for biotech businesses. 

Value investors have since swooped in, and reassuring FY26 results and guidance during earnings season last month propelled the rebound further.

Healthcare shares are now 42% higher since 3 June versus a 2% rise for the broader S&P/ASX 200 Index (ASX: XJO).

During the August earnings season, ASX 200 healthcare shares jumped 19% while the ASX 200 moved up 1.1%.

Here are 3 ASX 200 healthcare shares with buy recommendations and promising 12-month price targets from Bell Potter.

Mesoblast Ltd (ASX: MSB)

The Mesoblast share price is $2.21, down 0.9% today and steady over 12 months. 

Since 3 June, this ASX 200 healthcare share has risen 9.4%.

Bell Potter has a buy recommendation on Mesoblast shares with a $4.45 target.

This implies the Mesoblast share price could double over the next 12 months.

Analyst John Hester said: 

(All US$m) Revenues $120.2m and loss at the EBIT line -$49.9m were in line with our forecast. Ryoncil sales of $115m were at the mid-point of the guidance range.

Operating expenses $153m were dominated by R&D expense ($97m), driven by the investment in label expansion for Ryoncil and the ongoing Phase 3 trial for Rexlemestrocel in chronic lower back (CLBP).

Loss at NPAT $57.4m with net cash burn for the year -$43.8m inclusive of just -$13m in 2H26.

MSB has a long pipeline and label expansions for Ryoncil alone which we expect will come to market on a 3 to 5 year time horizon.

Pivotal moments in the short term include the interim readout on adult GvHD and the pending submission of the BLA for Rexlemestrocel in HF.

Neuren Pharmaceuticals Ltd (ASX: NEU)

The Neuren Pharmaceuticals share price is steady at $20.46 on Tuesday, and down 2% over 12 months.

Since 3 June, this ASX 200 healthcare share has streaked 51% higher.

Bell Potter has a buy rating on Neuren Pharmaceuticals shares with a $25.50 target.

This implies a potential 25% gain over the next 12 months.

Neuren Pharmaceuticals has also just started paying investors dividends.

Analyst Thomas Wakim said:

NEU remains very well capitalised with $286.5m in cash at 30-June. Considering the (1) strong cash position, (2) recent Daybue guidance upgrade, and (3) imminent Daybue launch in Europe, NEU have commenced a dividend program, starting with an interim dividend of $0.15/share (fully franked).

The dividend provides a moderate yield for shareholders, however capital growth will dominate future shareholder returns and is the reason to own the stock in our view, particularly as the binary Phase 3 readout in PMS draws closer (estimated in ~1H CY28), the result of which will largely determine whether NEU is a one-trick pony or whether they repeat the glory a second time round with NNZ-2591.

Sonic Healthcare Ltd (ASX: SHL)

The Sonic Healthcare share price is $19.44, down 0.7% today and down 15% over 12 months. 

Since 3 June, this ASX 200 healthcare share has risen 3%.

Bell Potter says ‘buy’ with a $27.50 target, suggesting a possible 41% upside ahead.

Analyst Martyn Jacobs commented:

SHL reported EBITDA of c.$1.92b (cc) which was within the guidance range of c.$1.87b – c.$1.95b.

On a reported basis, EBITDA of c.$1.93 was in line with consensus, but c.1.5% below BPe.

The result was impacted by a range of nonrecurring items that more than offset the one-off gain from the Brisbane lab sale &
leaseback transaction.

While the headline EBITDA margin was c.10bp lower than pcp, margins in the 2H showed meaningful improvement at c.19% v
c.16.7%.

The post 3 ASX healthcare shares to buy with 25% to 100% upside as sector rebound races higher appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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 Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A $500,000 superannuation balance can start to take on a new purpose once retirement arrives.

After years of building the balance, the focus may shift towards what that money can provide each year.

There are several ways to approach that, and I would be careful not to focus on the biggest possible income number.

Start with a sustainable approach

For me, retirement income should come from investments I would still be comfortable owning for years.

That could mean holding a mixture of dividend-paying ASX shares, exchange-traded funds (ETFs), and other assets rather than filling the portfolio with whichever shares currently offer the highest dividend yields.

A large dividend can be tempting, but it becomes far less attractive if the underlying business struggles and eventually cuts the payment.

I would prefer companies with dependable cash flows and a reasonable chance of at least maintaining (but preferably increasing) their dividends over time.

What could the income look like?

How much income a $500,000 balance could generate depends on how the money is invested.

At an average yield of 4%, the portfolio would produce around $20,000 a year.

A 5% yield would increase that to approximately $25,000, while 6% would generate around $30,000.

I think somewhere in that range gives investors a sensible idea of what could be possible without assuming an unusually high yield.

The income would not necessarily stay the same every year. Dividends can rise, fall, or occasionally disappear, which is another reason I would spread the portfolio across several investments.

Which ASX shares might help?

Telstra Group Ltd (ASX: TLS) could be one income holding I would consider.

Its mobile and internet services generate recurring demand, while the company has placed a growing dividend at the centre of its shareholder return plans.

Aurizon Holdings Ltd (ASX: AZJ) offers another type of income exposure through rail infrastructure and freight operations.

I might also consider Sonic Healthcare Ltd (ASX: SHL). Diagnostic testing provides exposure to healthcare demand, and the company has a long history of returning cash to shareholders.

These would only form part of a broader portfolio. I would want enough diversification that my retirement income was not overly dependent on one company or industry.

Growth still has a role

A retiree may need their superannuation to last for decades.

That means I would still want some investments capable of growing earnings and distributions over time.

Inflation gradually reduces what $20,000 or $25,000 can buy, so a portfolio that can produce increasing income has an advantage.

I would also be comfortable selling a small amount of investments when necessary rather than insisting that every dollar of retirement spending must come from dividends.

Foolish takeaway

A $500,000 superannuation balance could potentially generate somewhere around $20,000 to $30,000 a year from investments yielding between 4% and 6%.

I would be more interested in building a durable income stream than pushing for the top end of that range.

For retirement, I think a diversified portfolio with dependable income and some room for growth gives that $500,000 the best chance to keep working for years.

The post How much passive income could a $500,000 superannuation balance generate? appeared first on The Motley Fool Australia.

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• These ASX shares benefit from a high Aussie dollar

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 positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Sonic Healthcare. 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) is heading lower on Tuesday, with the market dropping back below 9,000 points.

At the time of writing, the benchmark index is down 0.68% to 8,949 points.

That puts the ASX 200 at its lowest level in 3 sessions and wipes out Monday’s small gain, when the index closed at 9,010 points.

The selling is also fairly widespread. Around 115 ASX 200 shares are falling, compared with 70 trading higher and 15 unchanged.

So, what is weighing on the market today?

Oil is back near US$100

Oil prices are getting plenty of attention after another skirmish in the Middle East conflict.

Brent crude settled at US$97.31 a barrel on Monday after reaching US$98.06, its highest level since late July. It is trading around US$96.80 this morning.

The move followed another escalation between the US and Iran, including attacks involving oil tankers and warships around the Strait of Hormuz.

That’s keeping concerns around energy prices, inflation and interest rates in focus.

There was also little direction from Wall Street overnight, with the US stock market closed for the Labor Day public holiday.

Heavyweights are pulling the index lower

Several of the ASX 200’s largest companies are trading lower this morning.

Commonwealth Bank of Australia (ASX: CBA) shares are down 0.64% to $160.51, while ANZ Group Holdings Ltd (ASX: ANZ) shares have fallen 0.61% to $37.70.

CSL Ltd (ASX: CSL) shares are down 0.81% to $171.79, and Wesfarmers Ltd (ASX: WES) has slipped 0.40% to $76.99.

REA Group Ltd (ASX: REA) is also among the weaker large-cap shares, falling 1.22% to $161.17.

Resources are holding up better

The resources sector is providing some support, helped by higher commodity prices.

BHP Group Ltd (ASX: BHP) shares are almost flat at $62.94, while copper prices have climbed to record levels in London trading.

Gold miners are also doing better. Northern Star Resources Ltd (ASX: NST) shares are up 0.77% to $23.47, while Evolution Mining Ltd (ASX: EVN) shares are 0.27% higher at $14.94.

Santos Ltd (ASX: STO) shares are up 0.36% to $8.38 as energy stocks benefit from higher oil prices.

Foolish takeaway

What I find more interesting is how quickly the ASX 200 has lost momentum over the past month.

The index was trading above 9,250 points in mid-August, but has now fallen by more than 3% from those levels.

Yes, that’s still only a modest pullback. But with oil prices rising and interest rate concerns hanging around, investors may need to get used to a bit more volatility.

The post The ASX 200 has dropped to a 3-day low. Here’s what’s happening appeared first on The Motley Fool Australia.

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