Highlights

  • Pro Medicus (PME): Bell Potter maintains Buy rating with AUD 320 target price
  • ResMed (RMD): Canaccord Genuity issues Buy rating with AUD 46.50 target price
  • Both stocks supported by strong structural healthcare demand and recurring revenue models

 

The Australian healthcare sector continues to attract selective broker optimism despite broader market volatility and mixed sector sentiment. Within this landscape, two standout ASX-listed companies — Pro Medicus Limited (ASX:PME) and ResMed Inc (ASX:RMD) — have retained strong support from leading investment houses.

Recent broker commentary from Bell Potter and Canaccord Genuity highlights continued confidence in both companies’ long-term structural growth profiles, driven by digital healthcare adoption, cloud-based medical imaging, and global demand for sleep and respiratory solutions.

Pro Medicus: High-Quality Healthcare Tech Backed by Structural Growth

Pro Medicus remains one of the most closely followed healthcare technology stocks on the ASX. The company operates a cloud-based medical imaging platform, widely used across radiology networks, hospitals, and diagnostic centres globally.

Bell Potter has reaffirmed a Buy rating on Pro Medicus, maintaining a price target of AUD 320, reflecting expectations of continued earnings growth supported by long-term contracts and increasing global adoption of cloud imaging systems.

The broker view emphasizes Pro Medicus as one of the highest-quality companies on the ASX, supported by the structural shift in radiology toward cloud-based archiving and workflow systems. This transition has been a key driver of sustained demand for the company’s flagship Visage platform.

Recent sector commentary suggests that healthcare imaging providers are benefiting from increasing volumes of diagnostic imaging globally, alongside efficiency improvements in hospital IT infrastructure. These dynamics continue to support recurring revenue visibility and long-duration contract models.

Share Performance Context

Pro Medicus shares have experienced periods of volatility despite strong underlying fundamentals. Investor sentiment has been influenced by valuation concerns and cyclical rotations within the broader healthcare sector. However, broker confidence remains anchored in long-term contract stability and high operating margins.

ResMed: Global Leader in Sleep Therapy with Strong Earnings Momentum

ResMed Inc remains a dominant global player in sleep apnea treatment devices, masks, and connected care software platforms. The company continues to benefit from growing global awareness of sleep disorders and increasing diagnosis rates across developed markets.

Canaccord Genuity has reiterated a Buy rating on ResMed with a price target of AUD 46.50, reflecting confidence in sustained revenue growth and margin expansion driven by product innovation and operating efficiency.

Recent earnings commentary highlights strong revenue growth supported by demand for sleep devices and digital health services. Improvements in gross margins have been driven by manufacturing efficiencies and cost optimisation, while cash flow generation remains robust.

Business Model Strength

ResMed’s model combines hardware, software, and data analytics, enabling recurring revenue streams through connected care ecosystems. This positions the company to benefit from long-term healthcare digitisation trends, particularly in home-based care and chronic disease management.

The company also continues to invest in artificial intelligence-enabled devices and cloud-based monitoring tools, which are increasingly important in improving patient adherence and clinical outcomes.

Healthcare Sector Context and Broker Sentiment

The broader ASX healthcare sector has experienced periods of volatility, with valuation compression impacting investor sentiment across multiple sub-sectors. However, broker research increasingly highlights a divergence between short-term market weakness and long-term structural growth opportunities.

Healthcare technology companies such as Pro Medicus are benefiting from digital transformation in hospital infrastructure, while medical device companies like ResMed are supported by demographic trends and rising chronic disease prevalence.

Recent broker commentary suggests that healthcare valuations are becoming more attractive relative to historical averages, particularly in high-quality names with strong cash flow visibility and global market exposure.

Comparative Investment Characteristics

While both companies operate in the healthcare sector, their business models differ significantly.

Pro Medicus is primarily a healthcare technology and software provider focused on imaging platforms and long-term enterprise contracts. Its growth is driven by software adoption, system integration, and expansion within hospital networks.

ResMed operates in the medical devices segment, focusing on respiratory therapy equipment and sleep disorder solutions. Its growth is supported by global demand for sleep apnea diagnosis and treatment, alongside increasing adoption of connected healthcare devices.

Despite these differences, both companies share common attributes that underpin broker optimism, including scalable business models, strong margins, and recurring revenue streams.

Market Positioning and Investor Focus

Investor attention on both stocks remains closely linked to long-term healthcare trends rather than short-term cyclical movements. Pro Medicus continues to be viewed as a premium healthcare technology platform with a strong competitive moat, while ResMed is regarded as a global leader in a large and underpenetrated medical device market.

Broker ratings reflect confidence in both companies’ ability to sustain growth through innovation, global expansion, and continued demand for healthcare efficiency solutions.

Conclusion

Pro Medicus and ResMed remain two of the most closely watched ASX healthcare stocks, supported by positive broker ratings from Bell Potter and Canaccord Genuity respectively. While operating in different segments of the healthcare sector, both companies benefit from strong structural growth drivers, recurring revenue models, and global demand tailwinds. Broker optimism reflects confidence in their long-term earnings visibility, even amid broader sector volatility. As healthcare continues to evolve through digital transformation and rising global demand, both PME and RMD remain positioned as key beneficiaries of these long-term industry shifts.