Is this biotech giant a buy?
The post Why CSL (ASX:CSL) could be an ASX 50 share to buy appeared first on The Motley Fool Australia. –
If you’re looking to boost your portfolio with some quality shares, then you might want to look at the ASX 50 index. This index is home to some of the largest and highest quality shares on the Australian share market.
One ASX 50 share that could be worth considering is CSL Limited (ASX: CSL).
CSL is one of the world’s leading biotechnology companies. It comprises two businesses, CSL Behring and Seqirus. The former is a specialist in plasma-based products, whereas the latter business specialises in vaccines.
Combined, the two businesses have been underpinning solid sales and profit growth for CSL in recent years. And while plasma collection headwinds could subdue CSL’s near term growth, its long term outlook appears very positive. This is thanks to increasing demand for its core therapies and vaccines, and its lucrative research and development (R&D) pipeline.
In respect to the latter, thanks to its consistent investment in R&D (~11% of sales each year), CSL has a pipeline filled to the brim with products that have the potential to generate millions and potentially even billions of dollars in sales each year.
One of these is CSL112, which is a novel apolipoprotein A-I infusion therapy that has been shown to have an immediate and significant impact on the ability to remove cholesterol from arteries. Its phase 3 trial is enrolling more than 17,000 patients from approximately 1,000 medical centres across the world, with the results due at the end of the year.
Another is is clazakizumab, which is being developed to treat kidney transplant rejection. This product alone could generate peak sales of US$5.4 billion.
Is the CSL share price in the buy zone?
While opinion is admittedly divided on whether the CSL share price is in the buy zone right now, one broker that is bullish is UBS.
It currently has a buy rating and $330.00 price target on the company’s shares. Based on the latest CSL share price, this implies potential upside of almost 15% over the next 12 months.
Should you invest $1,000 in CSL right now?
Before you consider CSL, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and CSL wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of May 24th 2021
The CSL (ASX:CSL) share price has fallen 7% this week
ASX 200 up 0.3%: CSL downgraded, Zip drops, Charter Hall impresses
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of 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 Bruce Jackson.