ASX healthcare shares have been a mixed bag in 2025, with some names outperforming the market by a wide margin while others have floundered.
The S&P/ASX 200 Health Care Index (ASX: XHJ), which tracks the sector's market performance, has climbed 7.75% this year to date.
This is behind the broader market represented by the S&P/ASX 200 Index (ASX: XJO), which is up nearly 11% over the same time.
But experts reckon ASX healthcare shares are poised to take centre stage in 2025. Could this signal value waiting to be unlocked? Let's see.
Outlook for ASX healthcare shares
Analysts and investment firms are bullish on the Australian healthcare sector's long-term fundamentals. This could be positive for ASX healthcare shares.
Earlier this year, Wilsons Advisory described the sector's outlook as "highly attractive", citing a combination of robust earnings growth and relatively low valuations.
Healthcare expenditure is also projected to surge over the coming years. The Federal Budget projected healthcare spending of $112.7 billion by FY25, increasing to $123 billion the following year.
Meanwhile, Fidelity International highlights the ageing population as a growth driver for healthcare companies.
It says the number of people aged over 65 is expected to double by 2050.
Healthcare has another notable structural driver: the global population aged over 65 will double by
2050 and the proportion of incomes we spend on keeping ourselves healthy will continue to grow.
Aussie investors are also jumping on board the healthcare gravy train.
According to investment firm VanEck's latest investor survey, ASX healthcare shares are in one of the top sectors Australians plan to target in 2025 (alongside technology).
The survey found that 77% of respondents were eyeing international equity exchange-traded funds (ETFs), with healthcare topping the list of sectors due to its defensive nature and growth potential.
Where are the opportunities?
According to VanEck, global and ASX healthcare shares have "significant, long-term growth potential" for investors.
The company says there are four primary ways to gain exposure to the space, namely businesses in the pharmaceutical, biotech, equipment and supply, and healthcare services domains.
VanEck also says diversification is key.
Investors can gain exposure to healthcare companies by buying shares in healthcare companies directly or via a fund or ETF which focuses on investing in the healthcare sector.
Meanwhile. analysts are bullish on two giants among fellow ASX healthcare shares.
Bell Potter rates CSL Ltd (ASX: CSL) a buy with a $345 price target, forecasting "above market" profit growth for the biotech giant.
ECP Asset Management also has long-term projections on CSL, being of $500 apiece by 2027.
ResMed Inc (ASX: RMD) is also rated highly by brokers. A total of 15 from 18 brokers covering the stock rate it a buy, according to CommSec.
Ord Minnett rates ResMed a buy, with a $40.05 per share price target. It projects profit growth of 13% from the respiratory device business in 2025.
Final thoughts
According to experts, ASX healthcare shares are well-positioned for 2025. Part of this is due to the outlook on the broader healthcare industry.
Meanwhile, analysts see plenty of earnings potential from companies within the sector.
Stepping back, healthcare is known as a 'defensive' industry because it is not strongly correlated to the ups and downs of the broader economy. In other words, healthcare is considered necessary in both good and bad economic times.
