2 excellent ASX 200 healthcare shares named as buys

Check out these excellent ASX 200 healthcare shares…

| More on:
Group of doctors celebrate by pumping fists in the air

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The healthcare sector could be a good place to look for long term investment options. This is due to a number of positive tailwinds that are supportive of growth such as ageing populations and increased cases of chronic disease.

But which ASX 200 healthcare shares should you consider? Here are two that are rated highly:

CSL Limited (ASX: CSL)

The first ASX 200 healthcare share to look at is CSL. It is one of the world's leading biotherapeutics companies.

It has been an exceptionally positive performer over the last decade due to a number of factors. This includes successful acquisitions, its high level of investment in research and development (R&D) activities, its growing plasma collection network, and increasing demand for its leading therapies and vaccines.

In respect to its therapies, CSL's portfolio includes lucrative and life-saving products such as Privigen, Hizentra, Idelvion, and Afstyla. And thanks to its almost billion-dollar (and growing) annual investment in R&D, this portfolio will continue to expand in the future.

While the pandemic has hit plasma collections and could lead to elevated costs in the near term, this headwind is only expected to be temporary. In light of this, it could be worth being patient with its shares. UBS currently has a buy rating and $3.30 price target on the company's shares.

Sonic Healthcare Limited (ASX: SHL)

A second ASX 200 healthcare share to look at is Sonic Healthcare. It is a leading medical diagnostics company with operations across the world.

Sonic certainly has had the wind in its sails over the last 12 months. This led to the company reporting a 33% increase in half year revenue to $4.4 billion and a 166% jump in first half net profit to $678 million in February. Pleasingly, an equally strong second half is expected.

This is being driven largely by strong demand for COVID-19 testing services but also positive performances across the rest of the business.

One broker that is a fan of the company is Credit Suisse. Last month it retained its outperform rating and lifted its price target to $43.50.

It expects demand for its testing services to increase as more transmissible COVID variants spread widely and cause an uptick in infections. It expects this to support strong earnings, allowing Sonic to pay down debt and support potential acquisitions.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia has recommended Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Healthcare Shares

Two lab workers fist pump each other.
Healthcare Shares

Is it time to cash in on Sigma shares?

Shares have extended after the Chemist Warehouse merger.

Read more »

Person holding Australian dollar notes, symbolising dividends.
Healthcare Shares

Buy this ASX 200 share that is swimming in cash

Bell Potter sees potentially big returns on offer from this cashed-up stock.

Read more »

Shot of a scientist using a computer while conducting research in a laboratory.
Healthcare Shares

Are CSL shares a buy after the biotech's FY25 forecasts?

Brokers continue to weigh in.

Read more »

Female pharmacist smiles with a digital tablet.
Healthcare Shares

Are Wesfarmers or Sigma shares a better buy in the pharmacy arena?

These two stocks are both leaders in the industry.

Read more »

A young man goes over his finances and investment portfolio at home.
Healthcare Shares

Down 20%, is the NIB share price undervalued?

Here's what Goldman Sachs is saying about this blue chip stock.

Read more »

four excited doctors with their hands in the air
Healthcare Shares

Sigma Healthcare shares rocket 39% on Chemist Warehouse merger approval

The ACCC doesn't believe the company's merger with Chemist Warehouse will lessen competition.

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

ASX 200 healthcare stock rockets on $75 million news

This marks another positive step for the company.

Read more »

Male doctor in a lab coat working at laptop looking serious.
Healthcare Shares

CSL shares are in the red for 2024. Are they a buy?

Meanwhile, the broader market has extended to new highs this year.

Read more »