S&P/ASX 200 Index (ASX: XJO) healthcare shares are on a roll, up by a staggering 42% since the sector began a rapid rebound, after a horror year, on 3 June.
The S&P/ASX 200 Health Care Index (ASX: XHJ) reached a 9-year low on 3 June following a 39% 12-month pummelling.
Healthcare shares tanked due to many industry headwinds, including the FX rate for companies reporting in US dollars; cost of living pressures; higher shipping and labour costs; and US regulatory uncertainty for biotech businesses.
Value investors have since swooped in, and reassuring FY26 results and guidance during earnings season last month propelled the rebound further.
Healthcare shares are now 42% higher since 3 June versus a 2% rise for the broader ASX 200 Index.
During the August earnings season, ASX 200 healthcare shares jumped 19% while the ASX 200 moved up 1.1%.
Here are 3 ASX 200 healthcare shares with buy recommendations and promising 12-month price targets from Bell Potter.
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Mesoblast Ltd (ASX: MSB)
The Mesoblast share price is $2.21, down 0.9% today and steady over 12 months.
Since 3 June, this ASX 200 healthcare share has risen 9.4%.
Bell Potter has a buy recommendation on Mesoblast shares with a $4.45 target.
This implies the Mesoblast share price could double over the next 12 months.
Analyst John Hester said:
(All US$m) Revenues $120.2m and loss at the EBIT line -$49.9m were in line with our forecast. Ryoncil sales of $115m were at the mid-point of the guidance range.
Operating expenses $153m were dominated by R&D expense ($97m), driven by the investment in label expansion for Ryoncil and the ongoing Phase 3 trial for Rexlemestrocel in chronic lower back (CLBP).
Loss at NPAT $57.4m with net cash burn for the year -$43.8m inclusive of just -$13m in 2H26.
MSB has a long pipeline and label expansions for Ryoncil alone which we expect will come to market on a 3 to 5 year time horizon.
Pivotal moments in the short term include the interim readout on adult GvHD and the pending submission of the BLA for Rexlemestrocel in HF.
Neuren Pharmaceuticals Ltd (ASX: NEU)
The Neuren Pharmaceuticals share price is steady at $20.46 on Tuesday, and down 2% over 12 months.
Since 3 June, this ASX 200 healthcare share has streaked 51% higher.
Bell Potter has a buy rating on Neuren Pharmaceuticals shares with a $25.50 target.
This implies a potential 25% gain over the next 12 months.
Neuren Pharmaceuticals has also just started paying investors dividends.
Analyst Thomas Wakim said:
NEU remains very well capitalised with $286.5m in cash at 30-June. Considering the (1) strong cash position, (2) recent Daybu guidance upgrade, and (3) imminent Daybu launch in Europe, NEU have commenced a dividend program, starting with an interim dividend of $0.15/share (fully franked).
The dividend provides a moderate yield for shareholders, however capital growth will dominate future shareholder returns and is the reason to own the stock in our view, particularly as the binary Phase 3 readout in PMS draws closer (estimated in ~1H CY28), the result of which will largely determine whether NEU is a one-trick pony or whether they repeat the glory a second time round with NNZ-2591.
Sonic Healthcare Ltd (ASX: SHL)
The Sonic Healthcare share price is $19.44, down 0.7% today and down 15% over 12 months.
Since 3 June, this ASX 200 healthcare share has risen 3%.
Bell Potter says buy with a $27.50 target, suggesting a possible 41% upside ahead.
Analyst Martyn Jacobs commented:
SHL reported EBITDA of c.$1.92b (cc) which was within the guidance range of c.$1.87b – c.$1.95b.
On a reported basis, EBITDA of c.$1.93 was in line with consensus, but c.1.5% below BPe.
The result was impacted by a range of nonrecurring items that more than offset the one-off gain from the Brisbane lab sale &
leaseback transaction.While the headline EBITDA margin was c.10bp lower than pcp, margins in the 2H showed meaningful improvement at c.19% v
c.16.7%.
