The performance of the healthcare sector has been relatively underwhelming in recent times.
While this is disappointing, the team at Wilsons believes that things could change in the near future. This could make it a great time for investors to ensure that their investment portfolios are positioned to take advantage of this. The broker said:
After ~2 years of lacklustre performance at the index level, the outlook for the ASX 300 healthcare sector is highly attractive. The sector is well positioned to outperform over the medium-term given its earnings trajectory is considerably stronger than the broader market while the sector's valuation is also at highly attractive levels.
But which ASX 300 healthcare stocks could be worth considering? Let's take a look at three that its analysts are feeling bullish on and have in their Focus Portfolio. They are as follows:
CSL Ltd (ASX: CSL)
The first ASX 300 healthcare stock that Wilsons has in its Focus Portfolio is biotechnology giant CSL.
The broker is currently overweight on CSL's shares. Though, it has admittedly been more positive in the past. It explains:
On balance, our increasingly constructive view on the outlook for Behring's earnings recovery warrants our modest overweight exposure to CSL, albeit our level of conviction is tempered to an extent by the subdued outlooks of Vifor and Seqirus and the somewhat uncompelling level of R&D pipeline upside over the medium-term. Valuation wise, CSL is broadly in line with our 'fair value' range, balancing the fact that a) CSL trades on forward PE of ~27x which is below its 5-year average, and b) CSL is somewhat 'expensive' relative to global biopharma peers. To become more constructive on CSL, we are looking for a) developments in the R&D pipeline, b) demonstrated progress on Behring's margin recovery, and/or c) a meaningful turnaround in the performance of Vifor and Seqirus.
ResMed Inc. (ASX: RMD)
Another ASX 300 healthcare stock that features is sleep disorder treatment ResMed.
Its analysts highlight that its shares trade at a sharp discount to historical multiples. And given how weight loss drugs concerns are starting to ease, it feels a re-rating could take place soon. Wilsons commented:
Notwithstanding RMD's solid earnings-driven share price recovery, the company remains on an excessive valuation discount at a 12-month forward PE multiple of ~23x, which is a ~30% discount to both the 5-year average and RMD's 'pre GLP-1' level. We expect RMD's valuation to re-rate higher as GLP-1 concerns progressively abate and the market shifts its focus to the strong fundamental outlook of the business.
Telix Pharmaceuticals Ltd (ASX: TLX)
Finally, this high-flying radiopharmaceuticals company could be worth a closer look.
Wilsons is very positive on the ASX 300 healthcare stock's Illuccix product and extensive pipeline. It said:
A key appeal of TLX is that its extensive pipeline offers significant valuation and earnings upside potential, which is complimented by the robust cash flows already generated by Illuccix. Following recent pipeline updates on TLX591 (SELECT rPFS data) and Zircaix (BLA submission) there is still a cavalcade of catalysts that represent 'de-risking' points in TLX's valuation and will drive the share price over the next 12 months.
