CSL Limited (ASX: CSL) shares have been caught up in the broad market weakness on Wednesday.
In afternoon trade, the biotherapeutics giantâs shares are down almost 1% to $304.97.
This means CSLâs shares have given back the gains they made yesterday in response to a solid half year update.
Should you buy CSL shares?
The team at Morgans has been running the rule over the result and has given it the thumbs up.
In response, the broker has retained its add rating and lifted its price target by 8% to $337.92. This implies potential upside of approximately 11% from current levels.
What did the broker say?
While Morgans believes that CSLâs half year result was a touch mix, it has seen enough to remain very positive on the company. It commented:
1H results were mixed, with underlying constant currency (cc) profit a little light (+9%), but on strong, in-line revenue growth (+25%). Record plasma collections (+36%) propelled plasma products (Ig, +19%) and Behring sales (+11%), while Seqirus posted high-single digit growth despite reduced immunisation rates, and newly acquired Vifor was solid (+15%).
Underlying earnings were driven mainly by Behring (US$1,875m; 55% of op income) as plasma collections increased (+36%) and now stand >10% above preCOVID levels, driving plasma-based product sales (Immunoglobin (Ig) +19%; Albumin +11%), but some non-plasma-based products managed to perform much better (Hemophilia recombinants +22%; Specialty peri-op bleeds +8%).
Looking ahead, the broker has upgraded its earnings estimates following this update and its valuation accordingly. It concludes:
Our FY23-25 earnings increase modestly (up to c3%), mainly on lower net interest expense, higher Behring and Vifor sales, partially offset by lowered GM. We roll forward multiples, with our blended DCF, PE and EV/EBITDA based price target increasing to A$337.92 (A$312.21 previously).
The post Are CSL shares a buy following the ASX 200 giant’s latest results? appeared first on The Motley Fool Australia.
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More reading
- Everything you need to know about the boosted CSL dividend
- CSL share price lifts on half-year earnings beat
- CSL share price on watch amid US$1.6b profit
- 5 things to watch on the ASX 200 on Tuesday
- How I’d generate a $10,000 second income from CSL shares
Motley Fool contributor James Mickleboro has positions in CSL. 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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