Bell Potter has released fresh analysis on two ASX stocks operating in healthcare and medical sectors. One is listed as a buy, with big upside, while the other has a sell recommendation.
Let's see what triggered these ratings.
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Biome Australia Ltd (ASX: BIO)
This ASX stock is technically in the consumer staples sector. However it licences, develops, and markets evidence-based, complementary medicines, including nutraceuticals vitamins and weight management products and live biotherapeutics.
Bell Potter has a "buy" recommendation and price target of $1.00 (previously $0.95).
From this week's closing price of $0.465. This indicates a big upside of 115.05%.
The broker said Biome Australia reported another record quarterly result, with cash receipts up c.84% yoy to c.$7.1m and positive Net Operating Cash Flow of c.+$0.9m which is tracking well toward BPe of c.$3.0m for FY26.
The result reflected a strong rebound from 4Q25 which experienced a decline in both measures due to timing issues.
BIO's operating leverage is starting to come through and we would expect to see EBITDA improve further through FY26. If BIO maintains cost discipline, it should deliver a maiden free cash flow result this year.
The broker believes maintaining quality in its growth performance should eventually see it recognised by the market resulting in a re-rate.
AVITA Medical Inc (ASX: AVH)
It's a very different case for this ASX healthcare stock.
AVH shares are already down 67.15% year to date and Bell Potter anticipates a further slide.
The broker noted the CEO recently departed the company and soft revenue results are likely going to result in a substantial rationalisation program.
AVH cannot continue to support the current cost base in the absence of sales growth and its ongoing ~$10m/qtr cash burn.
The broker said over the last three years the company has required ongoing re-capitalisation which is now unsustainable, resulting in further painful shareholder dilution.
The company issued a trading update on Friday, reporting September quarter revenues of approximately $17 million – down 12% compared to the prior corresponding period, 8% lower than the June quarter, and below the consensus estimate of $20 million.
Based on this guidance, Bell Potter has a sell recommendation and price target of $1.20 on these ASX healthcare shares.
This indicates a downside of 12.4% from Friday's closing price of $1.37.
