Can CSL shares deliver market-beating returns for investors?

Is this a good place to invest your hard-earned money? Let's find out.

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CSL Ltd (ASX: CSL) shares have a long history of delivering market-beating returns for investors.

For example, over the last 15 years, the biotechnology giant's shares have generated an average total return of 16.55% per annum.

To put that into context, a $10,000 investment back in 2009 would have grown to be worth approximately $99,500 today.

And while the market has historically delivered a very solid 10% per annum return, CSL's outperformance has led to significantly greater wealth creation than if you had just invested the same $10,000 into an index fund.

For instance, $10,000 compounding at 10% per annum would grow to become approximately $42,000 in 15 years.

That's less than half the return of CSL shares during the same period. Clearly it has been a great stock to hold in your portfolio.

But does this remain the case today? Let's see if CSL can be a market-beater again in the future.

Can CSL shares beat the market?

Analysts at Morgans are feeling very positive about the company's outlook. So much so, CSL has been named on the broker's best ideas list again this month. Morgans said:

While shares have struggled of late, we continue to view CSL as a key portfolio holding and sector pick, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares trading at 25x, a substantial discount (20%) to its long-term average.

The broker has an add rating and $315.40 price target on its shares. This implies potential upside of 12% for investors from current levels.

Bigger returns to come

Over at Macquarie, its analysts are even more bullish on CSL shares. Macquarie currently has an outperform rating and $330.00 price targets on them. This suggests that potential upside of almost 17% is possible over the next 12 months.

But the returns won't stop there according to the broker. Macquarie is so positive on the medium term outlook for the key CSL Behring business that it sees scope for the CSL share price to climb beyond $500 within three years. If this proves accurate, it would mean a return of 77% from current levels.

While nothing is guaranteed in the investment world, it is fair to say that analysts are quite confident that CSL can continue its market-beating ways long into the future. Time will tell if that is the case.

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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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