The team at Goldman Sachs has been running the rule over the healthcare sector following the conclusion of earnings season.
Two ASX 200 healthcare shares that have been given the thumbs up by the broker are listed below. Here's what its analysts are saying about them:
Cochlear Limited (ASX: COH)
This hearing solutions company could be a top option in the sector according to Goldman Sachs. Its analysts believe Cochlear is well-placed to outperform its guidance in FY 2023 thanks to improving trading conditions.
Goldman has a buy rating and $265.00 price target on its shares. It commented:
We believe Cochlear screens well on these fundamental factors, and largely avoids the margin uncertainties prevalent across other verticals. We expect a sequential improvement in momentum through 2H23 (further elective volume improvement and new processor launch momentum, potentially tempered by some moderation in Acoustics). We forecast above guidance in FY23E (GSe: $306m vs. $290-305m) and believe shares will now be further supported by a newly announced multi-year buyback program (GSe: $75m/year).
ResMed Inc. (ASX: RMD)
Another ASX 200 healthcare share that Goldman Sachs is bullish on is ResMed. It is forecasting double-digit earnings growth through to at least 2026. It also sees scope for even quicker growth depending on the Philips re-entry after a major product recall.
Goldman has a buy rating and $38.00 price target on this sleep treatment company's shares. It said:
The timing/nature of Philips' re-entry remains an important debate, but under most scenarios we expect excess demand through end-2023 at least. Whilst supply shortages and cost inflation mitigated the tailwinds through FY22, the benefits to RMD are significant, and could accrue over many years. As operational pressures continue to ease we see margin/cost dynamics improving, both near- and long-term. We expect a sequentially stronger 2H23, and currently model an EPS CAGR of +11% FY23-26E (with potential upside depending on how competitive dynamics develop).
