In Brief: Tariffs, Healthcare & Wealth Platforms

This story features HUB24 LIMITED, and other companies. For more info SHARE ANALYSIS: HUB

Looking through the market chaos of will he (Trump), won’t he on tariffs, analysts dissect the pros and cons of earnings fundamentals versus share prices.

-Specialist platform providers too cheap to ignore
-The twists and turns of tariffs on healthcare 
-Focus on CSL & ResMed

By Danielle Ecuyer

Quote of the week comes from Martin Whetton, Head of Financial Markets Strategy, Westpac

“The world, political and financial is looking on with horror, not bemusement, at an administration that prioritises the signing of an executive order for more water-power in shower heads, on the same day that the bond market breaks and investors question the long-term credibility of the administration having flopped on the largest of their policies, tariffs”.

Wealth platforms, a bargain or not?

Only a week after the reciprocal tariffs were announced by President Trump, investors have been on an extreme roller coaster ride. Even with Thursday’s rally, the ASX200 is still down almost -2% on the last week. While we at FNArena can’t turn off from the gyrations and the news, for others an ‘ignorance is bliss’ bias might at least save the emotions from the temptresses of ‘fear and greed’ as emotions are torn up and down on an announcement basis.

But one can never be too far from fundamental analysis, as great companies at great prices are always worth reading about.

The week has given analysts a chance to get down to some serious number crunching, offering some context around how earnings in specific sectors are being impacted by tariffs, or not, and the market drawdowns on share prices versus the likely earnings forecast outcomes.

The specialist platform providers (SPP) have been proverbially caught in the eye of the sell-off storm with a high correlation, in both sentiment and potentially earnings, to markets.

Wilsons is one of a few brokers to emphasise the “sharp and significant” de-rating in the sector is a rare opportunity for investors to reweight into some of the highest-quality FinTech businesses on the ASX.

The analyst is referring to Hub24 ((HUB)), Netwealth Group ((NWL)) and Praemium ((PPS)) and explains these platforms have no exposure operationally to tariffs, but there is the effect on operating leverage due to lower fees on a decline in funds under administration balances.

While ongoing risk-off sentiment can drive funds outflows, particularly for higher-net-wealth individuals who are usually an older demographic and more concerned over wealth preservation.

On that point, Hub24 is the least exposed compared to Netwealth and Praemium, as Hub24 has greater exposure to Superannuation than investor directed portfolio services (IDPS), like wrap products and SMAs, or self-managed accounts.

The broker also expects limited impacts from retail uncertainty on the Private Credit sector, and at worst, the funds are diverted from Private Credit vehicles to other income-bearing vehicles of the Pooled Cash Accounts.

From a positive perspective, more risk-off periods are more likely to raise the amount of funds in Pooled Cash, with Wilsons anticipating both Hub24 and Netwealth to benefit, with the former usually having a higher weighting of funds under administration exposed.

Wilsons upgrades Hub24 to Overweight (Buy-equivalent) from Market weight (Hold-equivalent) with a target price of $65.06. Netwealth is also upgraded to Overweight from Market weight, target price of $25.12.

Praemium is downgraded to Market weight (Hold-equivalent) from Overweight with a target price of 67c due to the short-term potentially negative impacts from IDPS and high-net-wealth individuals where elevated fund outflows might be more pronounced.

RBC Capital also highlighted Netwealth’s 3Q25 results, which met expectations and consensus estimates. This analyst points to a slight miss on funds under administration due to higher-than-anticipated market movements. This platform has continued to experience robust inflows in April despite the risk-off sentiment and global uncertainty on tariffs.

Management reconfirmed the confidence in net flows for FY26 and the defensive aspect of the group’s revenue streams, which included elevated trading volumes and cash balances. RBC rates the stock as Positive.

Canaccord Genuity also reflects positively on the 3Q25 report from  NetWealth, with record net inflows for the period, though in line with consensus. This analyst believes the group will remain a leader in terms of share of system platform flows, which means the biggest question for investors remains around the impact on system flows by global market uncertainty.

Hold rating and $31 target price retained. Hub24 is due to report its 3Q25 result on April 15.

Healthcare stocks and tariffs

It may seem like a dim and distant eon ago, but the healthcare sector was once the bastion of quality, stable earnings growth, with defensive moat-like characteristics for investors in turbulent markets.

Covid well and truly started the nail-in-the-coffin around that narrative, as well as the weight-loss GLP-1 drug scare and now Trump’s tariffs, as various companies battled the challenges of lockdowns, inventory build-ups and cost imposts. The sector is nevertheless populated by quality companies.

How much can a healthcare company bear?

Goldman Sachs was happy to embrace the meaty topic and continues to believe the “relative” defensive nature of healthcare stocks offers a good backdrop for investors, with the sector preference for ResMed ((RMD)), then CSL and Sonic Healthcare ((SHL)).

CSL has an estimated circa 80% of its US immunoglobulin (Ig) sales generated from its Broadmeadows (Australia) plant, with the option to lift capex to increase its manufacturing presence in the US, the broker explains.

While uncertainty over pharmaceutical tariffs is likely to overhang the CSL stock, the analyst points to the US-domiciled plasma collections footprint with scope to offset the potential size of the tariffs.

CSL and Cochlear ((COH)) are currently exempt from tariffs, with minimal impact on Sonic, Ramsay Healthcare ((RHC)), Australian Clinical Labs ((ACL)) and Healius ((HLS)), where the tariffs may impact pricing for consumables, but given labour is over 50% of the revenue in terms of the cost input, no major impacts to earnings estimates are anticipated.

For Medtech, including ResMed and Fisher & Paykel Healthcare ((FPH)), the estimated tariff exposure is around 10% and 5%, respectively, based on the geographic mix of production. With both companies, there is scope to lift prices and extricate cost savings from input materials.

In terms of exposure to private insurers, ResMed has the highest exposure at over 70% of US revenue.

Goldman Sachs is Buy rated on ResMed, CSL, and Sonic, with a Neutral rating on Cochlear.

Morgan Stanley is more aligned with Goldman Sachs than RBC Capital (see below) when it comes to CSL.

This analyst dissects the relative exposure of CSL to potential tariffs and considers what is currently being discounted in CSL’s share price, highlighting the US represents around 50% of the group’s revenue and around 35% of the group’s revenue is generated from non-US markets.

The analyst also highlights around 60% of the cost of goods sold is plasma collections and around 90% is originated in the US, with circa 10% from non-US markets.

Manufacturing represents around 40% of cost of goods sold, with an assumed circa 75% conducted in non-US markets, which implies around 35% of the US revenue is conducted in non-US markets.

Morgan Stanley explains pharmaceutical products were excluded as part of the reciprocal tariffs, and more notable blood fractions, immunological products, and vaccines for human design were highlighted as exempt under Annex II.

No change to its $313 target price and Buy-equivalent rating. The broker calculates in all different modelling tariff scenarios, the discounted cash flow valuation is above the current share price, now around $242.

Even under a worst-case scenario, Morgan Stanley’s DCF modeling still generates a value of $246 for CSL shares.

RBC, by comparison, has conducted a sensitivity analysis on reciprocal tariff rates and estimates an unmitigated impact of a 20% tariff on German pharmaceuticals, 10% on Australian pharmaceuticals, and a 31% tariff on Swiss pharmaceuticals should Trump go ahead on his announcement on April 2 for this sector.

For CSL, this would result in an impact of -$270m-$290m, with the mid-point being an estimated -7% EPS impact.

If the tariffs were to be introduced and remain in place indefinitely, RBC would lower the CSL valuation to $258 per share from $279.

Macquarie also scanned across the potential tariff impacts on healthcare stocks, highlighting Ansell ((ANN)) as one of the most impacted, with over 93% of the supply chain facing US tariffs.

Fisher & Paykel Healthcare’s position has improved, with all products compliant with the USMCA, i.e. exempt from Mexican tariffs, although NZ is facing a 10% tariff.

ResMed is viewed as well-placed, with around 40% of manufacturing in the US.

Cochlear’s hearing implants remain exempt, and CSL is currently exempt, but at risk of potential pharmaceutical sector tariffs.

ResMed, Fisher & Paykel Healthcare, and CSL are all rated with an Outperform or Buy-equivalent rating. While Ansell and Cochlear are ascribed Neutral or Hold-equivalent ratings.

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