Will the CSL Limited share price jump through $100?

Credit: Brogan & Partners

The CSL Limited (ASX: CSL) share price has fallen below $100…

Source: Yahoo!Finance

Source: Yahoo!Finance

…but it may not be there for long.

CSL is Australia’s leading biopharmaceutical company, focused on the research, development and manufacture of products to treat and prevent coagulation disorders, bleeding disorders and more.

CSL has a rich history of development and treating a multitude of disorders the world over. CSL is well-run, and its share price track record is first-rate. For example, CSL shares produced an average annual total shareholder return (dividends plus capital gains) of 24% per year over the past decade.

But with overseas exposure and many years of growth potential, as well as more research and development underway, there may be little reason to believe a slow-down in CSL’s share price performance would be anything more than a short-term problem.

It’s true, CSL’s debt levels are growing, which may be a reason for some investors to raise an eyebrow. However, CSL’s debt is undoubtedly cheaper than its equity (i.e. its shares on the market), so increasing its debt makes sense, especially given the company is capable of achieving sustainably wide profit margins.

Data soured from CapitalIQ

Data sourced from S&P Capital IQ

It seems analysts agree. Of the 13 analysts surveyed by The Wall Street Journal, 12 analysts currently have buy recommendations on CSL shares – only ONE has a sell rating. The average price target of the analysts surveyed is $103.30.

Buy, Hold or Sell?

Following the crowd and assuming a stock is a buy simply because everyone says so is a dangerous pastime. Indeed, while CSL appears extremely lucrative on first glance, investors should conduct their own due diligence prior to making a purchase of its stock. That being said, I think CSL shares appear a worthwhile investment for investors focused on the ultra-long term – even at today’s prices.

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Motley Fool writer/analyst Owen Raszkiewicz owns CSL Ltd shares.

Owen welcomes your feedback on Google plus (see below), LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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