With the S&P/ASX 200 Health Care index down 11% since the start of the year, now could be an opportune time to look at the sector.
But which shares should investors consider buying? Two healthcare shares that brokers rate as buys are listed below. Here's what you need to know about them:
Cochlear Limited (ASX: COH)
The first ASX 200 healthcare share to consider is Cochlear. It is a leading manufacturer and distributor of cochlear implantable devices for the hearing impaired. It has operations across over 30 countries distributing its Nucleus sound processors and Baha bone conduction implants.
While demand for its devices was subdued during the worst of the pandemic, Cochlear has bounced back over the last 12 months with strong profit growth. Pleasingly, analysts at Morgans expect this positive form to continue in the coming years.
It commented: "Cochlear maintains a dominant position in the implantable hearing solutions segment. While we continue to believe a full recovery from Covid-based disruptions still has time to play out, improving demand and strong pipeline, coupled with management's increasing confidence, is all suggestive of an improving earnings profile."
Morgans has an add rating and $233.20 price target on Cochlear's shares.
ResMed Inc (ASX: RMD)
Another high quality ASX 200 healthcare share to consider is ResMed. It is a global leader in the development, manufacturing, distribution, and marketing of medical devices and cloud-based software applications that diagnose, treat, and manage respiratory disorders. These include sleep disordered breathing, chronic obstructive pulmonary disease (COPD), neuromuscular disease, and other chronic diseases.
ResMed has been growing at a solid rate for years and appears well-positioned to continue this trend long into the future. Especially given its world class product portfolio, high level of investment in R&D, the growing prevalence and education of sleep disorders, and a major product recall by one of its rivals.
Morgans is also positive on ResMed. It commented: "While we believe the next few quarters will likely be volatile, as Covid-related demand for ventilators continues to slow and core sleep apnoea volumes gradually lift, nothing changes our medium/longer term view that the company remains well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain."
The broker has an add rating and $40.46 price target on the company's shares.
