3 pivotal moments you might have missed for CSL shares in 2022. What now?

CSL Limited (ASX: CSL) shares endured a bumpy year in 2022, with the biotech company’s share price swaying between $240 and $305.

When all was said and done, the CSL share price outperformed the S&P/ASX 200 Index (ASX: XJO) by approximately 6%. However, outperforming the benchmark wasn’t exactly a high bar to clear considering the index fell by nearly 7%.

Here’s a look back at the key events for CSL shares in 2022.

Funding secured

In a disappointing start to last year, CSL shares tumbled 18% in the first six weeks of trading in 2022, as shown below. This was a much more pronounced fall than the 5% retreat by the Aussie benchmark.

Investors were on edge as the world grew more uncertain amid Russia’s invasion of Ukraine. Only a few weeks earlier, CSL had announced its intentions to acquire Swiss pharmaceutical company Vifor Pharma for A$16.4 billion.

The weakened market sentiment cast doubt on whether CSL would still be able to raise the funds needed to acquire Vifor. Though, on 14 February 2022, the $750 million share purchase plan had been completed — attracting over $940 million worth of applications. Likewise, the company proceeded to raise $4 billion by issuing bonds in the United States debt market in April.

Vifor enters the room

Between June and August, CSL shares bounced back by around 15% as the acquisition of Vifor drew closer. On 2 August, shareholders were notified that the completion of the deal was slated to take place by 9 August.

In light of the landmark deal, CSL managing director and CEO Paul Perreault said:

Joining CSL, the Vifor business adds near-term value along with a clear path to long-term sustainable growth. It also adds an outstanding management team, along with a high-value and complementary portfolio of products and market-leading position in the nephrology and iron deficiency spaces.

The acquisition of Vifor brings CSL’s products under development to 37 in total and increases its existing pipeline by 32%. Analysts have mostly praised the addition, giving CSL greater diversification in its offerings.

New era for CSL shares

The third and final pivotal moment for CSL shares in 2022 came when longstanding CEO Paul Perreault revealed his plans to retire in 2023.

After 10 years at the helm of one of Australia’s largest companies, Perreault has passed the baton to chief operating officer Dr Paul McKenzie. Following the news in December, the CSL share price proceeded to slip 4.5% over the rest of the month.

What could be ahead for CSL shares?

The first line item of 2023 will likely be Perreault officially stepping down from his role in March. From here, the former CEO will act as a strategic advisor to the company for six months to allow a seamless transition.

In terms of the CSL share price… Citi analysts are forecasting earnings per share (EPS) growth greater than 20% for FY23 and FY24. Hence, the Citi team has slapped a $340 price target on the biotech, representing approximately 19% upside from here.

Similarly, Macquarie has a favourable view on CSL shares for the year ahead. According to the investment bank’s latest model portfolio, CSL holds the highest weighting at 8.3% and a price target of $343.

The post 3 pivotal moments you might have missed for CSL shares in 2022. What now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler 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. 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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