CSL shares could pop 9% on surprising results if history repeats itself

Investors don't quite know what to do with the biotech giant ahead of its half-year results on Tuesday morning.

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CSL Ltd (ASX: CSL) results are due out Tuesday morning, and it could be a huge day of trading for the healthcare stock.

Already on Monday CSL shares plunged more than more than 5% at one stage after unfavourable test results for its CSL112 drug were disclosed.

History suggests, though, that if the latest financial figures look good, CSL shares could more than wipe out that loss plus more.

Biotech stocks can swing wildly

This time two years ago, CSL's report revealed that it had implemented efficiencies in its plasma collection network while it was dormant during the COVID-19 pandemic.

That news, a US$1.7 billion half-year profit, and a confirmation of its forward guidance sent the share price soaring 8.5% that day.

For a huge biotechnology company like CSL, it doesn't take much to get the market excited enough to move the dial on valuation.

So there is no reason why this can't happen again this Tuesday.

eToro market analyst Josh Gilbert noted that CSL's 2023 financial results had been well received by investors, sending the share price 10% higher since last reporting season.

"Shareholders were pleased with the healthcare giant's FY23 results, where revenue growth went up 31% year-over-year to US$13.31 billion, and the company's FY24 guidance continued to hold firm," he said.

"CSL's projected underlying profit range of US$2.9 billion to US$3 billion for FY24 has provided reassurance to investors eagerly anticipating the company's half-year results."

Everyone craving direction on CSL shares

One risk highlighted recently was regulatory developments coming out of Europe.

"The company's share price faced a decline [last] week following news of a UK investigation into alleged anti-competitive behaviour from CSL Vifor. 

"If found guilty, CSL faces potential fines and reputational damage, which may impact the company's FY24 results."

Considering the mixed signals, investors will be seeking some sort of firm direction on Tuesday morning.

"They are keen to ascertain whether CSL has sustained its course toward recovery following the turbulence its share price experienced in 2023."

Professional investors are still pretty keen on CSL shares, with 12 out of 14 analysts currently rating the healthcare giant as a buy.

Motley Fool contributor Tony Yoo has positions in CSL. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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