CSL Limited (ASX: CSL) shares have been out of form in 2023.
As things stand, the biotechnology giant's shares are on course to record a decline of 7%.
But according to a note out of Citi, things could be very different next year, with the broker tipping some big returns for investors.
What is Citi saying about CSL shares?
Firstly, let's take a look at the note from last week and see what Citi is saying about the company.
According to the note, the broker attended the virtual Plasma-Derived Therapies investor event of rival Takeda.
Pleasingly, it came away from the event feeling very positive about immunoglobulin demand growth despite competition from FcRns. It explains:
We attended Takeda's virtual Plasma-Derived Therapies (PDT) investor event. Takeda is expecting mid-to-high single digit volume growth for Immunoglobulin (Ig) over the medium-term despite the competition from FcRns – this is in-line with CSL's expectations and our forecasts. Takeda anticipates the impact of anti-FcRn to be limited to <10% of total IG market.
Citi also highlights that Takeda's plan to expand its manufacturing capacity demonstrates its confidence in demand remaining very strong. It adds:
Takeda disclosed for the first time its plans to expand manufacturing capacity by 50% over the next 5 years, a sign of its positive outlook for Ig demand. Takeda PDT margins improved in 1H23 (numbers undisclosed) and are expected to be in-line with group level (OPM ~30%) over the "mid to long term".
But what about returns?
Citi has retained its buy rating and $325.00 price target on CSL's shares.
Based on its current share price of $266.92, this implies a potential upside of ~22% for investors over the next 12 months.
And with the broker expecting a ~1.5% dividend yield in FY 2024, the total return stretches to approximately 23.5%.
If Citi is on the money with its recommendations, a $10,000 investment would turn into approximately $12,350 in 2024.
