Broker upgrades CSL shares to 'buy' — could they hit $335?

Another upgrade for the biotech giant.

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CSL Ltd (ASX: CSL) shares have caught a bid lately and lifted almost 6% in the past month, outpacing the broader S&P/ASX 200 Health Care Index (ASX: XHJ), which is up 3.7% in the same period.

In mid-morning trade on Thursday, shares in the biotech giant are swapping hands 1.1% higher at $298.02 apiece.

Brokers are turning bullish on CSL shares, with the average analyst rating a buy, according to CommSec.

Citi has joined the club and revised its rating on the stock in a note on Thursday. Let's take a look.

CSL shares revised higher

Citi upgraded its recommendation on CSL shares to a buy in a note today, setting an ambitious price target of $335 per share, according to The Australian.

If the investment bank's 12-month projection is correct, a $1,000 investment in CSL shares today could be worth around $1,120 in a year. That's around 12% upside potential.

Citi's analysts might have been impressed by CSL's growth trajectory. Profits grew 17% year over year to $1.9 billion in H1 FY24, with earnings per share (EPS) of $4.18. Management is calling for $3 billion at the bottom line for the full year.

Meanwhile, Baker Young analysts project CSL's profits to compound by 21% annually in the coming three years.

Other expert opinions: The $500 club

This performance has attracted positive attention from several analysts. Macquarie also rates CSL shares a buy, with a similar price target of $330.

It highlights the strength of CSL's Behring division and sees a potential $500 per share valuation by 2027. It, too, sees double-digit earnings growth as a catalyst for this valuation.

Similarly, Sam Byrnes from ECP Asset Management forecasts that CSL shares could reach $500 by 2027.

Morgans also sees more upside, giving CSL rating and a more modest 12-month price target of $315. Again, earnings growth is driving this view.

Finally, Wilsons Advisory recently noted that CSL's earnings trajectory was stronger than the broader market, making its current valuation potentially attractive.

For reference, CSL trades on a forward price-to-earnings ratio (P/E) of around 38 times, so you decide that one.

Foolish takeout

Shares in the company have climbed by 7.7% over the past 12 months. With Citi's upgraded rating and other positive broker views, the experts certainly think CSL shares are well-positioned for further growth.

However, as always, consider your financial circumstances and risk tolerance before making any investment decisions.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. 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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