CSL shares ‘well-positioned to deliver double-digit earnings growth’: expert

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

CSL Limited (ASX: CSL) shares are shrugging off the wider market malaise today and marching 0.3% higher.

The global biotech company closed at $296.20 per share yesterday and is currently trading for $297.05 per share.

In contrast, the S&P/ASX 200 Index (ASX: XJO) is down 1.4% in early afternoon trading.

CSL has handily outperformed the benchmark both in this calendar year and over the longer-term.

And according to Blackmore Capital portfolio manager Marcus Bogdan, CSL shares are well-positioned for more outperformance ahead.

Double-digit earnings growth flagged

Speaking to Livewire, Bogdan picked CSL as one of two ASX 200 listed shares he’d be happy to buy and hold for five years.

He said the biotech company “is well-positioned to deliver double-digit earnings growth with strong underlying demand returning for plasma products”.

According to Bogdan:

Plasma collection has been the single biggest factor driving the company’s share price performance during the COVID pandemic, where donor supply was significantly disrupted.

A sequential recovery in plasma supply is now well underway, benefiting from increased social mobility and the rollout of new donor centres. Indeed, we expect that the second half of 2022 will prove to be the trough in earnings for CSL, as annual collections are on track to exceed pre-COVID levels in FY23.

Bogdan also pointed to CSL’s influenza vaccine division, Seqirus, as offering ongoing tailwinds for the company:

Seqirus has been a critical source of diversification and growth for CSL during the ongoing plasma challenges experienced throughout the pandemic. Seqirus has been a beneficiary of heightened awareness of respiratory diseases and continued innovation in cell-based influenza vaccines has driven an improvement in margins.

Overall, we expect the structural demand drivers for plasma therapies and influenza vaccines to underpin growth for CSL for the foreseeable future.

How have CSL shares been performing?

While not shooting the lights out in 2022, CSL shares are a rare breed in that they’re in the green, up 1% since the opening bell on 4 January. That contrasts with the 13% year-to-date loss posted by the ASX 200.

Longer-term, CSL shares are up 135% over the past five years.

The post CSL shares ‘well-positioned to deliver double-digit earnings growth’: expert appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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