Among the 200 shares listed on the benchmark ASX 200 index are some of the highest quality companies that Australia has to offer. One of those is CSL Limited (ASX: CSL).
Why CSL shares?
CSL is widely regarded to be one of the highest quality shares on the ASX 200. It is a biotherapeutics company that develops, manufactures, and sells a range of life-saving plasma therapies and vaccines. It is also in the process of acquiring Vifor Pharma for ~$17 billion.
The addition of Vifor is expected to expand CSL's leadership across an attractive portfolio focused on renal disease and iron deficiency, complementing its existing therapeutic focus areas including Haematology, Thrombosis, Cardiovascular, and Transplant.
But it doesn't end there. Each year CSL invests in the region of 10% to 11% of its sales back into research and development (R&D) activities. In fact, earlier this month when the company released its half year results, it revealed an R&D spend of US$486 million for the six months. Pleasingly, CSL looks set to soon bear the fruit from its R&D labour. Management advised that a promising cluster of R&D programs are nearing completion.
Is the CSL share price good value?
The team at Morgans see a lot of value in the CSL share price. In response to its half year results, last week the broker put an add rating and $327.60 price target on its shares.
Based on the current CSL share price of $268.89, this implies potential upside of 22% for investors over the next 12 months.
It commented: "CSL – 1H above expectations; the "tide is beginning to turn" 1H results were better than expected, albeit in line with management's assumptions, with net profit down 5% in cc on 4% revenue growth."
"While near term challenges remain, the ongoing recovery in plasma collections, coupled with management's confidence, paints a favourable earnings picture," it concludes.
