MENU

Are CSL Limited (ASX:CSL) shares heading to $132?

The CSL Limited (ASX: CSL) share price is on the rise again and has its eyes on the symbolic $200 market.

In morning trade the leading global biotech company’s shares are up over 1.5% to $198.82.

Why are CSL’s shares pushing higher again today?

With no news out of the company, it appears that yet another positive broker note is responsible for its share price gain today.

Last week it was the turn of Goldman Sachs to declare CSL a buy with a $231.00 price target, whereas this week it is Citi’s turn to be bullish on the company’s prospects.

According to a note out of the investment bank, it has retained its buy rating and lifted the price target on its shares to a massive $232.00 following a change of analyst. This price target implies potential upside of over 16% for its shares.

Citi’s new healthcare analyst believes that CSL could surprise to the upside during the upcoming earnings season.

It has predicted earnings per share of approximately $4.95 in FY 2018, pricing its shares at 40x full-year earnings today.

Should you invest?

While CSL’s shares do trade at a premium to the market average, I agree with both Goldman Sachs and Citi that they are a buy today. As Goldman stated last week, premium returns and growth profiles warrant premium valuations.

But given this premium it is worth remembering that failing to live up to the market’s expectations would almost certainly lead to a sharp share price decline. This does mean that an investment in CSL carries a fair bit of risk and could be unsuitable for some investors.

In addition to CSL, Citi is also positive on Sigma Healthcare Ltd (ASX: SIG). It placed a high risk buy rating on the embattled pharmacy chain operator and distributor’s shares today.

And as I mentioned earlier today, Citi’s new analyst isn’t overly positive on Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) and has downgraded it to a sell rating.

Looking for the next growth story like CSL? Then don't miss out on these top growth stars.

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We're living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That's why at The Motley Fool we've been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Atlassian.

We've found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.