Goldman Sachs tips CSL share price to climb to $223.00

The CSL Limited (ASX:CSL) share price could keep climbing higher according to Goldman Sachs…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Ahead of its Global Healthcare Conference in the United States, this morning Goldman Sachs took a deep dive into its forecasts and target prices across its Australian healthcare coverage.

One company that came out of its review favourably was CSL Limited (ASX: CSL). According to the note, CSL remains the broker's top pick in the local healthcare sector and has increased its target price to $223.00.

This implies potential upside of around 9.4% from its last close price.

Why does Goldman Sachs rate CSL as a buy?

One reason Goldman is bullish on CSL is that it believes the strength the biotechnology giant is experiencing in Immunoglobulins outweighs operational risks.

The broker notes that the Immunoglobulins business is accelerating as its legacy products wind down. Further, recent industry feedback is consistently positive on the near/mid-term trajectory of Immunoglobulins.

In light of this, Goldman has "forecast double digit 3-year CAGRs for both Privigen (+10%) and Hizentra (+13%), driven by improved awareness/diagnosis and a positive shift onto the neurological indication, CIDP."

In addition, the broker notes that the current pricing environment is supportive and expects it to contribute to a stable gross margin development across the Behring business "despite the real threat from accelerating donor fee inflation and last litre."

Another reason to be positive is the company's Speciality products. Goldman has been positively surprised at the performance of this side of the business.

"Although Takhzyro (lanadelumab) is now widely available, Haegarda continues to take new patient starts in all markets in which it has launched. We continue to assume a distinct minority of new starts but relative stickiness in existing share."

Overall, the broker believes CSL is well-placed to grow its earnings per share at a strong rate through to at least FY 2021.

What about its peers?

The broker also reiterated its buy rating on Cochlear Limited (ASX: COH) and increased the price target on the hearing solutions company's shares to $209.00.

However, Goldman remains bearish on Ramsay Health Care Limited (ASX: RHC) and has once again rated its shares as a sell, albeit with an improved price target of $57.00. The broker has concerns over the decline in private health insurance participation rates and cost inflation, particularly with nurse wages.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Man sitting in a plane seat works on his laptop.
Opinions

Expert reveals 2 ASX stocks to sell — and 1 is a recent IPO

Toby Grimm from Baker Young shares his insights.

Read more »

Happy teen friends jumping in front of a wall.
Share Gainers

Guess which 4 ASX 200 shares are rocking new 52-week highs today!

Investors just sent these four ASX 200 shares to one-year-plus highs.

Read more »

A young woman holds her hand to her mouth in surprise as she reads something on her laptop.
Broker Notes

Why are Platinum shares rocketing 13% today?

This fund manager is getting a lot of love from investors today. Let's find out why.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Evolution Mining, Orthocell, Platinum, and Turaco shares are charging higher

These shares are having a better day that most on Thursday.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why CSL, Imricor, Jumbo, and Netwealth shares are falling today

These shares are under pressure on Thursday. But why?

Read more »

Three happy office workers cheer as they read about good financial news on a laptop.
Broker Notes

Morgans says these ASX stocks can rise 30% to ~50%

Let's see which shares could generate big returns for investors.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Broker Notes

Does Macquarie rate Fortescue shares a buy, hold or sell?

The broker has given its verdict on this popular mining stock.

Read more »

group of traders cheering at stock market
Share Market News

We could see the ASX 200 at 9,000 points by 2026. Here's why.

I wouldn't be shocked to see more records this year...

Read more »