Over the last 12 months the CSL Limited (ASX: CSL) share price has been one of the best performing large caps with an impressive gain of approximately 32%.
This latest gain means that the biotherapeutics company's shares have now provided investors with an average total return of 18.3% per annum during the last ten years.
To put that into context, if you had invested $25,000 in CSL's shares ten years ago that investment would have grown to be worth approximately $134,000 today.
Is it too late to buy CSL's shares?
Whilst I don't think it is too late to buy CSL's shares, I wouldn't necessarily expect them to race 32% higher again over the next 12 months.
At the current price I believe the company's shares have baked in all of FY 2018's growth and are about fair value now.
In light of this, I think there may be limited upside in the short-term, after which I would expect its shares to rise in-line with its future earnings growth.
The good news here is that brokers are very positive on its future earnings growth potential.
In fact, a note out of Credit Suisse last week revealed that its analysts expect the company to deliver earnings per share of approximately $4.65 in FY 2018 and $5.32 in FY 2019. That would mean earnings growth of around 14.5% next year.
The broker expects CSL's Seqirus vaccine business to play a key role in this growth and appears to have been impressed with its performance in the first-half of FY 2018.
I would have to agree with Credit Suisse on this and believe that its fledgling Seqirus business is destined to be a major contributor to the company's earnings in the future after initially operating at a loss.
All in all, I expect Seqirus will help the company continue to grow earnings at an above-average rate for a long-time to come, allowing its shares to continue their impressive outperformance.
Because of this I would rate CSL as my number one pick in the healthcare sector ahead of the likes of Nanosonics Ltd. (ASX: NAN) and ResMed Inc. (CHESS) (ASX: RMD).
