The CSL Limited (ASX: CSL) share price could see another positive development, according to a leading fund manager.
CSL is the biggest healthcare share on the ASX. It has operations across many treatments, including those that treat hemophilia and immune deficiencies and vaccines to prevent influenza.
The Vifor acquisition added iron deficiency and iron deficiency anemia expertise in heart failure, kidney disease, gastroenterology or inflammatory bowel disease, patient blood management and women's health.
What could be the next catalyst for CSL shares?
Fund manager Wilson Asset Management (WAM) has outlined a key factor that could excite investors regarding the ASX healthcare share.
WAM noted the CSL share price rose strongly in November amid a rally for the healthcare sector after "extreme lows". The fund manager suggested that a small, positive news flow helped send the CSL share price higher.
In the monthly update, WAM pointed out that Argenx's drug candidate VYVGART Hytrulo, did not meet its endpoint in a study for the treatment of Primary Immune Thrombocytopenia, which is an auto-immune disorder.
That disorder accounts for approximately 5% of CSL's intravenous immunoglobulin use and is the "first major setback of its kind, providing optimism in the outlook for demand for CSL's products."
WAM said the next catalyst beyond CSL's earnings result was the anticipated CSL 112 phase 3 readout, due early 2024.
2024 guidance
Investors are probably taking the outlook and guidance of the company into account when assessing CSL shares.
In FY24, the ASX healthcare share is expecting revenue growth of between 9% to 11% in constant currency terms.
Underlying net profit after tax (NPATA) is expected to grow by between 13% to 17% to between $2.9 billion and $3 billion at constant currency terms.
Capital expenditure is projected to be down 30%, and the CSL Behring division is expecting to recover to the pre-COVID margin in three to five years.
CSL is expecting to report a steady improvement in the return on invested capital (ROIC) thanks to double-digit earnings growth.
With the balance sheet, CSL is expecting its leverage to show a net debt to earnings before interest, tax, depreciation and amortisation (EBITDA) ratio of 2x.
CSL share price snapshot
The CSL share price is recovering, but it's still down slightly from where it started the year.
