Best ASX Healthcare Stocks to Watch in 2026: A 50% Crash and a Recovery in Progress

Why Trade Asx Stocks with Mitrade?

Try Free Demo Account

The ASX healthcare sector has had one of its worst 12-month stretches in modern history. The S&P/ASX 200 Health Care Index is down 39% over the past year. CSL has fallen more than 50% from its peak. Cochlear is trading 33% below its own historical valuation norm. The entire sector now sits at two-decade valuation lows according to Wilsons Advisory.

But here is what makes this moment genuinely interesting. UBS published a research note last week covering the sector and found that three of the four largest ASX healthcare stocks are forecast to grow earnings through FY2028. The share prices imply a collapse in profits that the underlying forecasts simply do not show. Three CSL directors bought shares on the open market in recent weeks with their own money, including the company chair and interim CEO. 

The sector is already up 20% from its June 3 lows as value investors have started moving in. August is ASX results season and the healthcare sector's full-year numbers are arriving this month. Cochlear reports on August 18, Sonic Healthcare on August 20, and CSL in mid-August. Those results will either confirm the selloff was justified or trigger a sharper recovery rally. 

This guide covers the five ASX healthcare names that matter most heading into reporting season, what the numbers actually show, and what traders need to watch from each one.

The ASX healthcare selloff has been driven by four separate headwinds arriving simultaneously, and understanding each one is essential to judging whether the sector has genuinely bottomed or whether there is more pain ahead.

First, the RBA's aggressive rate hiking cycle pushed Australian government bond yields higher, making defensive growth stocks like healthcare less attractive relative to fixed income. 

Second, the GLP-1 weight loss drug fear hit ResMed hardest in 2025. Investors worried that obesity drugs would dramatically shrink demand for sleep apnoea devices. The real-world data have not supported that fear at anywhere near the scale the market priced in. 

Third, CSL's Behring plasma division faced cost pressures and lower-than-expected immunoglobulin demand in certain markets, triggering a series of earnings downgrades that sent institutional investors heading for the exits. 

Fourth, hospital system pressures in Europe affected Cochlear, with surgery cancellations, waiting lists, and industrial action reducing cochlear implant procedure volumes below what management expected.

Three of the four largest ASX healthcare stocks are forecast to grow earnings at least until FY2028, and even CSL's near-term dip is measured in single digits, raising a genuine question about what explains a selloff so severe when the underlying earnings picture has not collapsed.

Wilsons Advisory expects the ASX healthcare sector's earnings per share to grow at a compound annual rate of 14% over the next three years. That is twice the growth rate forecast for the broader ASX 200. The answer to the valuation gap is sentiment, rate sensitivity, and fear-driven selling that overshot the fundamentals. 

That gap between prices and earnings forecasts is exactly what value investors have been exploiting since June 3, and it is exactly what August results season will either confirm or close. The sector is already up 20% from those lows but remains well below any reasonable fair value estimate if the earnings forecasts prove accurate.

SELL BUY

CSL (CSL.AU) is Australia's largest biotech company and trades at approximately 15.8 times forecast FY2026 earnings based on its current price of $133.98, still a significant discount to its five-year historical average price-to-earnings ratio and a valuation level not seen for years before this selloff.

Three company directors, including chair Carolyn Hewson and interim CEO Gordon Naylor, have bought shares on the open market in recent weeks with their own money. This is a strong signal that those closest to the business believe the selloff has overshot. Morgans retains a buy rating on CSL with a price target of $147.59, implying significant upside from where the stock trades today. 

CSL's full-year results are due in mid-August and will be the first comprehensive test of whether the Behring plasma division recovery is on track. Management has pointed to improving Behring revenue and a new CEO appointment as the specific catalysts the market should watch heading into FY2027.

SELL BUY

Cochlear (COH.AU) is the global leader in implantable hearing solutions with devices sold across 180 countries. Its FY26 full-year results are confirmed for August 18, 2026, making it the most precisely dated catalyst in the entire healthcare reporting season.

COH's FY26 underlying net profit guidance has been reduced to $290 to $330 million, down from the previous $435 to $460 million, reflecting lower sales volumes, margin pressure, and foreign exchange impacts. Hospital system constraints in Europe, lower US referrals, and reduced consumer spending on elective hearing procedures all contributed to the revision. That guidance cut is significant and should not be ignored. 

But the stock trades 33% below its own historical valuation norm, which means a substantial portion of the bad news may already be priced in. The August 18 result will show whether the full-year numbers land within or below the revised guidance range. A result at the upper end of the $290 to $330 million range would signal solid execution in a difficult environment and could trigger a meaningful relief rally.

ResMed (RMD.AU) is a dual-listed medical technology company traded on both the ASX and the NYSE, developing sleep apnoea devices and cloud-connected digital health solutions used by patients in 140 countries.

The stock entered 2026 already significantly sold down from its pre-2025 peak on fears that GLP-1 obesity drugs would reduce demand for sleep apnoea devices at scale. It then continued falling through the first half of 2026, hitting a low of around $25.50 in late May before recovering to $30.00 today. That recovery is real but modest. The stock remains well below its January 2026 levels, which tells you the market has not yet been convinced the GLP-1 fear was overblown even as the real-world clinical data has not shown demand destruction at the scale originally feared.

ResMed does not report on the Australian August results calendar as it follows the US quarterly reporting cycle, with its next update due later in 2026. Until that result provides a clear picture of device shipment volumes and subscription revenue trends, the stock is likely to remain range-bound between the $27 and $32 area where it has been trading since June. The investment case requires patience and a next quarterly result that shows the underlying business is growing despite the GLP-1 overhang.

SELL BUY

Sonic Healthcare (SHL.AU) reports its full-year FY2026 results on August 20, 2026, two days after Cochlear, making this the second major confirmed catalyst date in the healthcare reporting season.

Sonic's first-half FY2026 results showed revenue of AU$5.45 billion, up 17% on the prior corresponding period, with earnings per share of AU$0.53 compared to AU$0.49 a year earlier. The company has guided for up to 19% EPS growth for the full FY2026 year. Full-year revenue consensus sits at $7.396 billion, implying a strong second half is needed to match the first-half momentum. Sonic Healthcare traded at AUD 20.80 on July 23, 2026, and remains 25.63% lower over the past year, reflecting the broader sector selloff rather than specific deterioration in its operating performance. The August 20 result will confirm whether the guidance is achieved and whether the operational momentum from the first half carried through.

Telix Pharmaceuticals (TLX.AX) is a radiopharmaceutical company developing diagnostic and therapeutic products for cancer treatment. It is not currently available as a CFD on Mitrade.

Telix has been one of the sector's highest-profile growth stories in recent years. Its prostate cancer diagnostic product Illuccix generates commercial revenue across the US, Australia, and Europe. The stock fell 14% in July 2026 despite no negative news attached to the move, which analysts described as a pullback from an extended run rather than any fundamental deterioration in the business. Telix's August results will show whether the commercial revenue momentum has continued through the second half of FY2026.

Mitrade, regulated by ASIC under licence AFSL 398528, offers CSL (CSL.AU), Cochlear (COH.AU), ResMed (RMD.AU), and Sonic Healthcare (SHL.AU) as CFD instruments from a single zero-commission account. The August results season creates specific short-term trading opportunities that CFDs are well suited to.

Traders who believe COH's August 18 result will show the revised guidance has been met can go long in the days ahead of the announcement. Traders who believe the guidance cut was more severe than the market expects can go short. The same logic applies to Sonic Healthcare on August 20 and CSL in mid-August. 

Each result date is a live catalyst where a major healthcare stock typically moves 3% to 7% in the session following the release, giving active traders a clear directional setup with a defined catalyst. 

Stop-loss and take-profit controls appear directly on the Mitrade order screen before any trade is confirmed. 

You might be interested in…