The Motley Fool

CSL share price charges higher on broker upgrade

The CSL Limited (ASX: CSL) share price is on course to finish the week on a positive note.

In morning trade on Friday the biotherapeutics company’s shares climbed almost 3.5% to $236.89.

Why is the CSL share price pushing higher today?

As well as getting a boost from a rebound on Wall Street overnight, investors have been buying CSL’s shares today after it was the subject of a positive broker note out of Morgan Stanley this morning.

According to the note, the broker has upgraded CSL’s shares to an overweight rating from equal weight (neutral) and lifted the price target on them by 14% to a lofty $251.00.

This price target implies potential upside of around 10% over the next 12 months based on its last close price and excluding dividends.

Why is the broker now bullish on CSL?

Morgan Stanley made the move largely due to increasing demand for immunoglobulins.

This is a big positive for CSL as these products are far and away the biggest contributor to its revenue. In FY 2019 they generated US$3.5 billion or 42% of its full year revenue.

The broker believes that tight market conditions have swallowed up CSL’s supply increase and means there is upside risk to its guidance. It estimates that CSL’s immunoglobulins supply will lift 16% this financial year thanks to its collection strategy.

And although the broker suspects that industry disruption is inevitable in the future, it feels this is a few years away.

Should you invest?

I agree with Morgan Stanley on CSL and continue to believe that it is one of the best blue chip shares you could buy on the Australian share market.

Overall, I would class it as a strong buy along with fellow healthcare stars Cochlear Limited (ASX: COH) and ResMed Inc (ASX: RMD).

And let's not forget these blue chip shares which are also high quality options for investors to consider snapping up today. 

Best Blue Chip Shares for 2020 – NOW AVAILABLE!

You’re invited! For a limited time, The Motley Fool Australia is giving away an urgent new investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping 6.5% grossed-up dividend! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!


James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. 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 Scott Phillips.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.