RBC Capital Markets has issued a note to its clients this week, warning that the coming reporting season could be a difficult one for the healthcare sector.
But that's not to say they believe there isn't money to be made, with bullish price targets on a number of stocks.
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Doing it tough
The RBC team said broadly regarding the sector:
We are expecting a somewhat difficult reporting season for our covered Australian healthcare companies with most results either coming in line with consensus expectations or disappointing. We have a similarly challenging view for the remainder of 2026 with our covered companies likely affected by new management teams 'kitchen sinking' guidance, cost pressures impacting margins, and competitive threats constraining revenue growth.
RBC said they were flagging "potential result misses" from Cochlear Ltd (ASX: COH), Regis Healthcare Ltd (ASX: REG), Nanosonics Ltd (ASX: NAN), Australian Clinical Labs Ltd (ASX: ACL), Monash IVF Ltd (ASX: MVF), and a beat from CSL Ltd (ASX: CSL).
They went on to say:
In this context, we favour stocks with strong near-term earnings outlooks that can hold their current valuation multiples and obtain share price appreciation through earnings growth.
These companies included CSL, ResMed Inc (ASX: RMD), Cochlear, Ansell Ltd (ASX: ANN), and Integral Diagnostics Ltd (ASX: IDX).
Price targets looking attractive
Drilling down further into the companies expected to experience share price gains, RBC said they believed ResMed would deliver a "solid" result, with double-digit revenue and net profit growth.
RBC has a price target on ResMed of US$311 for its US-listed stock compared with $US257.58 currently, which would be a 20.7% gain if achieved.
For CSL, RBC expects "a better-than-expected result with revenue and gross profit exceeding consensus forecasts''.
RBC has a price target of $230 on CSL shares compared with $178.21 currently.
For Cochlear, the RBC team believe the hearing device company could miss consensus forecasts, but still has a bullish price target on the stock of $325 compared with $268.93 currently.
Regarding Ansell, RBC forecasts "a soft operational result with revenue and gross profit missing consensus expectations, but better cost management enabling an EBIT and NPAT beat''.
RBC has a price target of $41 on Ansell shares compared with $33.75 currently.
For Integral Diagnostics, RBC "forecast IDX's 1H26 revenue being in line with consensus, however earnings coming in below expectations''.
Despite this they have a bullish share price target of $3.50, compared with $2.59 currently.
