The CSL Limited (ASX: CSL) share price has done very well in the last few months. It's up by more than 10% since the start of 2023, as we can see on the chart below.
CSL is a healthcare giant with a market capitalisation of around $150 billion. I think it can keep rising over the rest of the year because of a few key factors.
Recovering from COVID
While CSL wasn't impacted as much as, say, ASX travel shares during the pandemic, the company did suffer from higher costs and lower plasma collections.
CSL is now seeing "record levels of plasma collections". In fact, in the first half of FY23, plasma collection grew by 36%. This acceleration underpins its ability to manufacture plasma products going forward, which was "excellent news for patient care", according to the company.
The ASX healthcare share continues to open new plasma collection centres, with continuing investment in technology and "yield initiatives".
CSL is also seeing good growth for its vaccine business (Seqirus) and iron deficiency division (Vifor).
Ongoing growth for each of its segments should be positive for the CSL share price as it leads to stronger earnings.
Defensive industry
The next 12 months look uncertain for some industries like retail and banking because of the higher interest rate environment, but healthcare could prove to be a defensive sector.
I'd say people don't choose when to get sick or when they need healthcare attention based on the latest Australian GDP movements. Healthcare demand could remain resilient and grow regardless of what the economy does.
Spending on healthcare could also increase in Australia because of the country's ageing demographics, coupled with a higher life expectancy. Government statistics show by 2042, the projected number of people aged over 85 will double.
In constant currency terms, CSL is expecting to achieve revenue growth of between 28% to 30%, while underlying net profit after tax (NPAT) could be between US$2.7 billion to US$2.8 billion. This would be growth of between 13% to 18%.
Investing for growth
One of the main things that has driven CSL higher over many years is its commitment to research and development.
By investing in creating new products and treatments, CSL is able to unlock new paths for growth. In its FY23 first-half result, it said that there are "multiple" programs at a late stage. For example, it says the launch of its HEMGENIX gene therapy for treating haemophilia B is an "exciting, groundbreaking new therapy".
In the first half of FY23, CSL spent US$606 million on research and development, showing the scale of its investment program.
If the CSL share price rises over time, which I think it will, it will be the development pipeline that unlocks the potential for the company.
Foolish takeaway
The company may not grow as much over the next decade as the last decade because of how big it is now, but I think the scale of the global healthcare opportunity is compelling. Indeed, it can enable CSL to keep growing in 2023 and over the rest of the decade.
