ASX 200 healthcare shares were chronically ill last quarter. Take a look

They aren’t exactly on the mend either.

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Key points

  • ASX 200 healthcare shares are taking a beating so far in 2022
  • Losses have spilled over from the previous year with many names deep in the red last quarter
  • Earnings for the sector are also estimated to fall, analysis shows

ASX 200 healthcare shares have struggled for the past six months, let’s face it. After peaking at 52-week highs of 47,760 back in September 2021, the S&P/ASX 200 Health Care Index (ASX: XHJ) now rests at 39,861. That’s a 16.5% decline over that time.

In the meantime, other sectors – mining and financials in particular – have thrust well above the laggards in sectors like healthcare and tech.

The divergence continues to widen as well. Since the onset of geopolitical conflict, commodity inflation, and a shifting interest rate cycle, ASX 200 healthcare shares are bottom-heavy and now trade near 52-week lows.

TradingView Chart

Pseudo-top performers

Categorising the ‘top’ performers amongst this group is a bit of a fallacy. According to Bloomberg data, only one name – Cochlear Ltd (ASX: COH) – finished higher for the period, with a 5% gain.

Otherwise, the basket faced heavy losses for the quarter. Indeed, ranking in terms of performance is more an exercise in ‘who fell more than the other’.

In terms of percentage change, Telix Pharmaceuticals Ltd (ASX: TLX) took out top spot with a heavy 40.2% loss for the period. Telix now needs to gain 66.7% to return to its pre-January levels.

But losses were heavy for the sector overall. The average loss for an ASX healthcare stock was 20.82% last quarter, calculated from Bloomberg data.

Names such as Imugene Ltd (ASX: IMU), Nanosonics Ltd (ASX: NAN), Clinuvel Pharmaceuticals Ltd (ASX: CUV), and Fisher & Paykel Healthcare Corp. Ltd (ASX: FPH) each fell further than the average.

Meanwhile, CSL Ltd (ASX: CSL), Ramsay Health Care Ltd (ASX: RHC), and ResMed Inc (ASX: RMD) managed to close out the quarter in much less pain.

Returns for the group and respective tickers for the top 10 performers last quarter are plotted below, in descending order.

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Not only that, but earnings per share (EPS) for the sector is estimated to slide further in 2022, after already taking a backward step since September 2021.

According to Bloomberg consensus data, by this time next year, analysts are forecasting the healthcare sector’s EPS to slide another 17% on average.

Curiously, the data also shows the consensus of analyst estimates predicts a negative 17 cents EPS for Telix in the next period and Imugene a negative 1 cent per share EPS loss. That’s in line with the EPS loss of 20 cents in 2020 for Telix but behind 2019’s result.

Meanwhile, CSL and Cochlear are estimated to deliver a $6.87 and $4.28 EPS result in the next period, according to Bloomberg consensus data.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd., Cochlear Ltd., and Nanosonics Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia owns and has recommended Nanosonics Limited. The Motley Fool Australia has recommended Cochlear Ltd., Ramsay Health Care Limited, and ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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