The Australian healthcare sector has rebounded well over the August reporting season, with Bell Potter analysts saying it was the key sector winner with about a 20% improvement.
Major improvements in stocks, including CSL Ltd (ASX: CSL), Ramsay Healthcare Ltd (ASX: RHC), and Cochlear Ltd (ASX: COH) bolstered the sector, following weakness earlier in the year.
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Where does the broker see good value now?
Bell Potter has selected seven ASX healthcare shares as its key picks going forward, some of which it says could more than double in value.
One of these is Clarity Pharmaceuticals Ltd (ASX: CU6), which Bell Potter said could have some big news shortly.
The broker said:
For companies with significant clinical readouts over the near-term, it's hard to go past CU6 which is expected to deliver topline data from its two PSMA imaging Phase 3 trials in early CY27. The data from these studies should support a New Drug Application for 64Cu SAR bis PSMA in CY27. Once approved, we expect 64Cu SAR bisPSMA will enter the ~US$3b PSMA imaging market with a highly differentiated label claim to the incumbents.
Bell Potter has a speculative buy rating on the shares with a $6.40 price target.
The broker is also predicting solid share price gains for Mesoblast Ltd (ASX: MSB), which has been preforming well since gaining FDA approval for its drug Ryoncil in late 2024.
Bell Potter said Mesoblast was also progressing a lower back pain drug, with a large potential market.
Its price target for Mesoblast is $4.45.
Other companies which are scaling up in the US are Lumos Diagnostic Holdings Ltd (ASX: LDX) and Aroa Biosurgery Ltd (ASX: ARX).
Bell Potter said regarding these two:
LDX is rapidly scaling its commercial channels ahead of its first flu season in North America, while ARX is driving strong direct growth through Myriad and positioning to capitalise on disruption across the outpatient chronic wound market with Symphony. Both remain well positioned in sizeable US growth opportunities.
Bell Potter has a price target of 25 cents on Lumos and $1.09 on Aroa.
The broker also likes Vitrafy Life Sciences Ltd (ASX: VFY), which it said "has recently emerged with the potential to develop dominant positions across various large cryopreservation markets, but particularly in the blood products segment''.
Bell Potter has a price target of $5.15 on Vitrafy.
The broker said Cogstate Ltd (ASX: CGS) delivered "stellar returns" in FY26, "following significant contract wins across an increasingly diverse range of clinical indications and channel partners''.
It has a price target of $3.70 on Cogstate.
And lastly, Bell Potter is also bullish on Pro Medicus Ltd (ASX: PME), which it said "continues to win ever more business in the US''.
Bell Potter has a price target of $226 on Pro Medicus.
