ASX healthcare shares have endured a brutal run in 2026, making the sector one of the market's weakest performers this year.
At the time of writing, shares in ResMed Inc (ASX: RMD) are down 21% this year, while Mesoblast Ltd (ASX: MSB) has fallen 26%. Meanwhile, Pro Medicus Ltd (ASX: PME) has slumped an even steeper 41%.
The sector is facing several major headwinds. Currency pressures, rising labour costs, and uncertainty around potential US tariffs have all weighed on investor sentiment, particularly for companies with large offshore operations.
The weakness has become so widespread that the S&P/ASX 200 Health Care Index (ASX: XHJ) is at an 8-year low, with many ASX healthcare shares trading near 52-week lows.
But while sentiment remains fragile, some brokers believe the sector-wide sell-off has created compelling buying opportunities for long-term investors.
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ResMed: Steady earnings growth
ResMed remains one of the ASX's largest and most established healthcare companies, specialising in sleep apnoea treatment and respiratory care devices.
The company benefits from strong recurring revenue streams, global market leadership, and growing long-term demand driven by ageing populations and increasing awareness of sleep disorders.
However, ResMed still faces challenges. Currency movements can impact earnings translation, while ongoing cost pressures and uncertainty around US healthcare policy remain key risks.
Despite this, analysts still see meaningful upside ahead. Morgans currently has an add rating and a $41.72 price target on the ASX healthcare share. That implies potential upside of around 46% from current levels.
If ResMed can continue delivering steady earnings growth while healthcare sentiment improves, the recent share price weakness could prove temporary.
Mesoblast: Elevated risks
Mesoblast is one of the ASX's most speculative healthcare shares, but it also offers potentially enormous upside if its cell therapy treatments continue progressing commercially.
Investor interest in Mesoblast has largely centred around its regenerative medicine pipeline and opportunities in inflammatory disease treatment.
Biotech investing always carries elevated risks, particularly around regulatory approvals, commercial execution, and funding requirements. Share price volatility can also be extreme.
Even so, some brokers remain highly optimistic. Bell Potter recently reaffirmed its speculative buy rating on Mesoblast shares and maintained a $4.45 price target on the company. That target suggests the stock could more than double over the next year if momentum improves and clinical progress continues.
For investors comfortable with higher risk, Mesoblast may offer significant upside leverage to positive developments.
Pro Medicus: Valuation concerns
Pro Medicus has long been considered one of the ASX's premier healthcare technology companies thanks to its globally respected medical imaging software platform.
The company has built a strong reputation for securing major hospital contracts in the US and delivering high-margin recurring revenue growth.
However, the Pro Medicus share price has deteriorated sharply in recent months as broader healthcare weakness and valuation concerns hit investor confidence.
Despite the sell-off, some analysts still remain bullish on the company's long-term outlook. Morgan Stanley currently maintains a buy rating on Pro Medicus shares with a 12-month price target of $200. That valuation implies potential upside of roughly 55% from current levels.
For investors seeking exposure to healthcare technology and long-term structural growth, Pro Medicus may now look far more attractive after its substantial decline.
