Why these 3 ASX healthcare shares could get a boost from the federal budget

We check whether additional funding for COVID-19 testing might impact these ASX shares?

| More on:
A group of medical researchers stands side by side with each other wearing white coats in their research laboratory with scientific equipment in the background.

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

Key points

  • The federal budget committed $546 million in government spending on COVID-19 PCR testing
  • That could be good news for ASX pathology shares Sonic Healthcare, Healius, and Australian Clinical Labs, according to one broker
  • Though, the broker notes that additional RATs offered to concession card holders and kids could offset some demand for PCR testing

The federal budget has, understandably, been the talk of the town today, with many market watchers questioning which shares will be budget winners and which might be less fortunate. And while ASX stocks in the retail, fuel, and automotive sectors have been in focus for various reasons, one broker is flagging a win for healthcare shares.  

So, why are ASX healthcare shares Sonic Healthcare Limited (ASX: SHL), Healius Ltd (ASX: HLS), and Australian Clinical Labs Ltd (ASX: ACL) in the post-budget spotlight? Let's take a look.

These 3 ASX healthcare shares might benefit from the budget

Broker RBC Capital Markets believes ASX healthcare shares could get a boost from extra spending on Medicare announced in the 2022/23 budget, as reported by the Australian Financial Review.

The broker is keeping an eye on ASX pathology giants on the back of a $546 million commitment to Medicare Benefits Schedule items used to conduct PCR tests.

The funding is intended to support Australia's pandemic response. However, it surprised the broker. RBC Capital Markets was quoted as saying:

The Government has extended the Medicare schedule for COVID testing.

However, the amount budgeted for 2022-23 suggests upside to our [financial year 2023] COVID testing forecasts if the budget assumptions eventuate.

Of course, more testing is likely good news for the pathology giants. Though, it might be slightly offset by more free Rapid Antigen Tests (RATs).

The government has also committed to spend another $1.6 billion to ensure all Australians have equitable access to RATs.

The broker's rose-coloured prediction didn't manage to boost the ASX healthcare giants' share prices on Wednesday.

None of the three pathology stocks significantly beat the S&P/ASX 200 Index (ASX: XJO)'s 0.67% gain.

At market close, the Sonic Healthcare share price is 0.17% higher at $35.79.

Meantime, Australian Clinical Labs ended the day in the green, gaining 0.2% to close at $5.11.

Finally, the Healius share price slightly outperformed the ASX 200 today. It rose 0.68% to finish at $4.43.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Australian Clinical Labs Limited and 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

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

This bombshell for ASX healthcare shares could hit 6 million Australians

This could have a large impact.

Read more »

Two scientists in a Rhythm Biosciences lab cheer while looking at results on a computer.
Healthcare Shares

2 ASX healthcare shares having a stellar run today

The ASX healthcare sector is down today but these two stocks are bucking the trend.

Read more »

A company manager presents the ASX company earnings report to shareholders at an AGM.
Healthcare Shares

Why this $13 billion ASX 200 healthcare stock is surging today

A change in sentiment for the healthcare player.

Read more »

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

This ASX 200 stock hit a 52-week low and a top broker thinks it can rebound

Patient investors may see this stock make a pleasing recovery.

Read more »

A couple smile as they look at a pregnancy test.
Healthcare Shares

Why this sold-off ASX healthcare share could be an exciting dividend buy

This could be a healthy stock for dividends.

Read more »

a smiling woman sits at her computer at home with a coffee alongside her, as if pleased with her investments.
Healthcare Shares

Is CSL the best ASX 100 share to buy now?

Bell Potter has good things to say about this blue chip star.

Read more »

Scientists in a laboratory look at a computer screen with anticipation on their faces representing a potential change in the performance of ASX biotech shares in FY23
Healthcare Shares

Down 10% in a month, are CSL shares feeling the sting of a potential disruption?

Brokers are still bullish.

Read more »

One girl leapfrogs over her friend's back.
Healthcare Shares

Doubled in a year! Does this booming ASX share have another 24% upside?

Let's take a look.

Read more »