On Thursday the CSL Limited (ASX: CSL) share price dropped 1% lower to finish the day at $1.99.
Despite this small decline, the biotherapeutics company's shares are up an impressive 25% over the last 12 months.
Why is the CSL share price up 25% in 12 months?
The CSL share price has been on fire over the last 12 months thanks to an impressive performance in FY 2018 and an equally positive start to FY 2019.
The company posted a net profit after tax of US$1,729 million in FY 2018, which was up by 29% on the prior corresponding period. This was driven by strong sales of its Privigen, Hizentra, and IDELVION products and supported by the launch of the HAEGARDA product.
The good news for shareholders is that the positive momentum has carried over into FY 2019 with the company releasing a solid half year result in February.
CSL posted a 9% increase in total half year revenue to US$4.5 billion and a 7% (10% in constant currency) increase in net profit after tax to US$1.2 billion.
The strong top line growth was the result of an 8% lift in revenue by its CSL Behring business and a 21% jump in revenue by its fledgling Seqirus influenza business.
Pleasingly, management also provided guidance which indicates that the second half will be even stronger.
It advised that the company is trending towards the upper end of its full year profit guidance range of US$1,880 million to US$1,950 million, which will mean year on year growth of approximately 13%.
Is it too late to invest?
Although its shares are not cheap at 33x estimated forward earnings, I think the quality of the business and its strong long term growth potential makes it deserving of this premium.
As a result, despite its strong share price rally over the 12 months, I would still class CSL as a buy along with fellow healthcare shares Cochlear Limited (ASX: COH) and ResMed Inc. (ASX: COH).
