ASX healthcare shares form a core component of many Australian investors' portfolios.
They are seen as offering essential services, and are therefore less susceptible to market volatility.
However, not all ASX healthcare stocks are created equal.
In a 17 July report, Australian Healthcare, broker Macquarie Group Ltd (ASX: MQG) provided its view on the Australian healthcare sector.
The broker is generally positive on the sector. In its coverage universe of 15 ASX healthcare stocks, it expects 9 to outperform and rates 6 as neutral.
Last week, I revealed Macquarie's 4 most preferred ASX healthcare stocks ahead of the reporting season.
These were CSL Ltd (ASX: CSL), ResMed CDI (ASX: RMD), Integral Diagnostics Ltd (ASX: IDX), and Neuren Pharmaceuticals (ASX: NEU).
In that report, Macquarie also named its 2 least preferred ASX healthcare stocks heading into the reporting season.
What are they?
Cochlear Ltd (ASX: COH)
Macquarie named Cochlear as one of its latest preferred ASX healthcare stocks at the moment.
While Cochlear is up around 60% over the past 5 years, it has faced challenges lately.
Explaining its view on Cochlear, the broker cited:
Weak guidance trend, reduced US insurance/medicare coverage, weakness in services revenue (N8 maturity) – albeit potential upside with Nucleus Nexa (US launch expected by Aug-25).
Macquarie currently has a neutral rating and price target of $270.50 on Cochlear shares.
With earnings season approaching, the broker is expecting Cochlear to deliver net profit after tax ( NPAT) of $397mn for FY25, which is slightly ahead of the midpoint of management's guidance. The broker will be looking for commentary regarding adult patient growth, details on the Nucleus Nexa system, and services revenue trends
Ansell Ltd (ASX: ANN)
The second stock was Ansell.
This was not a huge surprise, given that Macquarie had previously described Ansell as the "most exposed" to tariffs in its coverage universe.
In FY24, Ansell produced 42% of its revenue in the US. Its products are manufactured across nine different countries, with the largest being in Malaysia and Sri Lanka.
Macquarie expects Ansell to pass on about 75% of the tariff costs to customers by raising prices. However, this leaves the company with a "significant downside" risk if it can't fully pass them on.
When naming Ansell as its second least preferred healthcare stock heading into reporting season, the broker cited:
Downside risk to medium-term consensus expectations due to tariffs headwinds – [Macquarie] currently assume baseline 10% tariff across all regions with 75% pass-through, higher headline risks.
Macquarie currently has a neutral rating and price target of $33 on Ansell shares.
For FY25, Macquarie is forecasting earnings per share (EPS) of US$1.23, which falls at the midpoint of management's guidance. The broker is especially interested in management's commentary on tariff impacts, industrial trends, APIP savings, and updates on KC performance.
