The CSL Limited (ASX: CSL) share price jumped 4.19% in yesterday’s trade to close at $282.24 per share. Any gains are welcome at the moment as ASX shares find themselves in a bear market. But is this just a flash in the pan or can CSL shares push to the $300 mark again?
How has the CSL share price performed?
On a day where the S&P/ASX 200 Index (ASX: XJO) fell 5.62% lower, the CSL share price surged. Despite falling 8.79% lower in March, CSL is still the largest ASX 200 share by market cap. CSL is worth a whopping $128.15 billion right now.
The CSL share price last broke the $300 per share barrier back in January, but quickly fell below that mark in the coronavirus-induced crash. Investors have been spooked by the pandemic which has sent governments and central banks scrambling for action.
However, the Aussie pharma group hasn’t been hit too hard. For context, some ASX 200 shares have lost more than 70% since the start of March in the rout. I’m hoping we start to see some positive momentum behind CSL particularly as a leading pharmaceutical company in the current environment.
Given the high numbers involved, the $300 mark would require a 6.29% gain in the CSL share price from yesterday’s close. I’m hopeful, but not confident given the day to day volatility we’re seeing in ASX shares.
Should you buy into CSL right now?
CSL certainly isn’t the top of my buy list, nor is it what I’d consider a cheap ASX 200 share. However, I think the $128.15 billion valuation is based on strong R&D and a solid moat around the company’s earnings.
I see the CSL share price bouncing back above $300 when the pandemic passes. How much further it has to go, I really don’t know. However, I think there will be some short-term pain and I’d be waiting to buy.
Markets are inherently forward-looking, so valuations should reflect current economic expectations. While the current sell-off is hard to swallow, things will get better. It’s all about choosing good companies and buying at cheap prices for the long-term.
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As of 17/3/2020
Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. 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.