Prime Value’s Chief Investment Officer, ST Wong, recently joined Ausbiz to share his views on the outlook for healthcare stocks ahead of the 2025 reporting season. With valuations across the market elevated and earnings momentum slowing, Wong believes the healthcare sector is well‑placed to deliver resilience and opportunity for investors.
The Case for Healthcare
The broader ASX is currently trading at stretched valuations, with profit growth forecasts subdued. In this environment, defensive sectors like healthcare stand out. “Healthcare companies tend to offer more predictable earnings and long‑term structural growth drivers, which is what investors are looking for in uncertain markets,” says Wong.
CSL and ResMed: Key Picks
Wong highlighted CSL (ASX: CSL) and ResMed (ASX: RMD) as two healthcare leaders to watch this reporting season.
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CSL: With global leadership in blood plasma therapies and vaccines, CSL remains one of the most compelling growth stories on the ASX. “CSL is trading at a discount to its historical multiples, and its R&D investments continue to underpin strong margin opportunities,” Wong notes.
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ResMed: As a global leader in sleep and respiratory solutions, ResMed is delivering strong growth through its digital health platforms and product innovation. “ResMed combines operational efficiency with structural tailwinds in the healthcare sector — it’s a name we see delivering consistent returns,” Wong adds.
A More Cautious View on Cochlear
While Cochlear (ASX: COH) remains a world‑class business, Wong is more cautious heading into this season. “Cochlear has faced recent earnings downgrades and has a narrower product set compared to CSL and ResMed. It’s a quality company, but we see more near‑term risk,” he explains.
Emerging Opportunities
Beyond the big three, Wong also sees opportunities in select smaller‑cap names with strong fundamentals and structural tailwinds. While volatility may be higher, companies like these can offer attractive long‑term growth for investors prepared to look beyond the large caps.
Prime Value Perspective
At Prime Value, we believe reporting season will be particularly important this year, with high market valuations meaning even minor earnings disappointments could weigh heavily on share prices. Against this backdrop, defensive sectors such as healthcare provide an attractive balance of stability and growth.
“CSL and ResMed are our preferred picks in the sector. Both companies are globally competitive, well‑capitalised and positioned to deliver consistent earnings through changing market conditions,” says Wong.
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