CSL Ltd (ASX: CSL) shares will be closely watched by Aussie investors next week.
That's because the biotechnology giant is scheduled to release its half year results on Tuesday 11 February.
Ahead of the release, let's take a look at what the market is expecting from the popular ASX 200 blue chip share.
CSL half year results preview
According to a note out of Goldman Sachs, its analysts are expecting the company to deliver a half year result that is a touch ahead of the market's expectations.
Goldman is forecasting total revenue of US$8,663 million for the six months ended 31 December. This is 1.3% ahead of the consensus estimate.
This is expected to be driven by CSL Behring sales of US$5,739 million (+0.7% vs consensus), CSL Seqirus sales of US$1,852 million (+0.7% vs consensus), and CSL Vifor sales of US$1,072 million (5.6% vs consensus).
In respect to the key CSL Behring business, Goldman believes that better that consensus immunoglobulins and albumin sales will help the company outperform the market's expectations.
And with Goldman forecasting a better than expected EBIT margin of 34.8%, it believes that CSL's earnings will also come in ahead of consensus estimates.
The broker is forecasting half year underlying EBIT of US$3,017 million (+1.7% vs consensus) and NPATA of US$2,270 million (+2.2% vs consensus).
Should you buy CSL shares?
Given its positive view on the company's performance and its belief that CSL's shares are being undervalued by the market, it will come as little surprise to learn that Goldman Sachs is bullish on the investment opportunity here.
The broker currently has a buy rating and $325.40 price target on the company's shares.
Based on the current CSL share price of $271.94, this implies potential upside of almost 20% for investors over the next 12 months.
Commenting on its buy recommendation, Goldman Sachs said:
Our Buy recommendation for CSL is driven by (1) Strong growth in the IG market despite the entry of new drugs (anti-FcRn), (2) CSL market share gains in the IG market, Hemophilia, Hereditary Angiodema (HAE) and influenza vaccines, and (3) Gross Margin accretion driven by operational improvements to its cost base. We believe CSL's valuation multiple de-rate is onerous considering the growth outlook, particularly for IG therapies.
Key risks include: (1) US inflation impacting plasma donor fees, (2) Successful launch of human recombinant albumin in China, and (3) IG market share loss from launch of new therapies.
