The CSL Limited (ASX: CSL) share price may have risen an impressive 31% since this time last year, but one leading broker believes there could still be plenty more left in the tank.
According to a note out of Citi, its analysts have retained their buy rating and $165.00 price target on the biotherapeutics company's shares. This price target implies potential upside of almost 13% from the current share price.
What was in the note?
The broker remains bullish on Citi despite news that French pharmaceutical giant Sanofi plans to pay US$11.6 billion to acquire Bioverativ.
Bioverativ, a Biogen Inc. spinoff, is a maker of drugs for haemophilia, one of CSL's most lucrative revenue streams.
Citi's analysts don't believe that there is any danger to CSL in the short to medium term from Sanofi and the acquisition. However, beyond FY 2021 CSL could face disruption if Sanofi's phase 3 trial of its haemophilia treatment Fitusiran is a success.
Should you buy CSL shares?
I think CSL is one of the highest quality companies on the Australian share market and well worth considering as an investment today.
Over the last 10 years its shares have provided shareholders with an average annual total return of 17.2%, well ahead of the market average. This means that a $25,000 investment in its shares this time a decade ago would now be worth almost $125,000.
While I wouldn't necessarily expect its shares to generate returns of this magnitude over the next 10 years, I do feel there is a strong chance that its shares will continue to beat the market.
In light of this, I would put CSL up there with fellow healthcare sector shares ResMed Inc. (CHESS) (ASX: RMD) and Ramsay Health Care Limited (ASX: RHC) as a great investment option for investors in 2018.
