CSL Ltd (ASX: CSL) shares are pushing higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) biotech stock closed Friday trading for $239.31. In late morning trade on Monday, shares are changing hands for $240.06 apiece, up 0.3%.
For some context, the ASX 200 is up 0.4% at this same time.
At current levels, CSL shares are still down 6.4% since 3 April, when news of United States President Donald Trump's global tariff campaign roiled global markets.
And with Trump having threatened to extend US tariffs to imported pharmaceuticals, a lot of ASX investors remain concerned that the biotech company could face more headwinds over the coming months.
But are those concerns overblown?
Image source: Getty Images
CSL shares and the Trump tariffs
Argonaut's Harrison Massey isn't overly concerned about the impacts of potential US tariffs on CSL (courtesy of The Bull).
"CSL remains Australia's largest listed pharmaceutical company and offers an excellent defensive position in any long-term portfolio," said Massey, who has a hold recommendation on CSL shares.
As for its size, CSL has a market cap north of around $116 billion, making it the third largest stock on the ASX. Following its remarkable share price gains over the past year, Commonwealth Bank of Australia (ASX: CBA) has taken the mantle of the biggest share on the ASX, with BHP Group Ltd (ASX: BHP) coming in at number two.
Commenting on those looming Trump tariffs and CSL shares, Massey said:
If the US Trump Administration imposes tariffs on imported pharmaceuticals, CSL should be relatively sheltered from the financial impacts of these impediments given its size and low earnings risk.
And while Massey maintains a hold rating on the ASX 200 biotech share, he does see the potential for share price gains.
"On May 8, CSL was trading well below previous highs, so there's ample room for a share price improvement on any positive news flow," he said.
Could the ASX 200 biotech stock surge 28% from here?
A number of prominent brokers forecast that some outsized gains could be made by investing in CSL today.
Goldman Sachs, for example, has a $307.30 price target on CSL shares. That's 28% above current levels.
On 10 April, the broker looked at the potential impacts of Trump tariffs on the Australian Healthcare sector, noting that "the manufacturing exposure for the pharmaceutical sector is highly diversified across regions".
As for CSL shares, Goldman said:
Our analysis suggests CSL could supply up to ~80% of its US IG sales from its Broadmeadows (Australia) plant with the expansionary capex phase across FY19-FY23 providing flexibility should the tariffs on pharmaceutical products diverge across regions.
We note the possibility of CSL lifting capex to increase its manufacturing presence in the US to maintain long run market leadership in light of its key competitors established presence in the region.
