Investor interest in ASX healthcare stocks has climbed recently. The S&P/ASX 200 Healthcare Index (ASX: XHJ) dropped overall in FY25 but appears to have made some recovery so far in July.
As of lunchtime today, the index is 0.89% higher and has climbed 1.28% over the past five days. For the year to date, the index is 9.26% higher.
And continued momentum and strong potential upside for one ASX healthcare stock could drive the sector higher.
Summerset Group Holdings Ltd (ASX: SNZ) shares are flat at $11.00 as of midday today but have jumped 30.49% over the year. Over the past three months, the New Zealand retirement village developer and operator's share price has climbed 11.22%.
Here's what Macquarie Group Ltd (ASX: MQG) thinks of the stock.
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Macquarie revises Summerset Group's target price
Macquarie maintains its outperform rating on Summerset Group and has raised its target price to NZ$15.75, up from NZ$15.35. As of midday today, the company's shares are trading at NZ$12.02.
The revised target price represents a potential 28% upside for the stock.
The company is dual-listed on the ASX and the NZX, which means local Australian investors could also benefit from any potential upside.
In a note to investors, the broker said the company's new sales reached a record volume in Q2 2025, up 42% compared with the previous corresponding period, and 68% higher than Q1.
Total sales for the first half of 2025 are 22% higher period-on-period, making it a record half-yearly result for the business.
Summerset Group has seen "road-based improvement in sales and noted uncontracted new stock decreased 6% in the period and contracted stock increased by 50%."
"Australia saw 9 sales over the period, in line with FY24 contracts."
The company's resales volumes also meant it achieved the best Q2 on record and the second-best quarter overall.
"A combination of offering, improved housing market, competitor disruptions and sales team effectiveness is underpinning strong sales and contracting will drive 2H25 growth. Upside risk to FY25 earnings is emerging, while SUM's overall growth outlook remains attractive," the broker said in its investor note.
"Key risks include quantum and speed of improvement in housing market conditions, and associated impact on sales including St Johns. Success and speed of ramp-up in Australia is a key driver of growth in the medium to long term."
