Up nearly 33% in 12 months. Can the CSL share price climb higher?

The CSL Limited (ASX: CSL) share price rocketed 32.53% higher in FY20 but is the Aussie biotech positioned for more growth this year?

| More on:
CSL share price Digitised bubbles of cells representing ASX biotech shares such as CSL

Image source: Getty Images

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

The CSL Limited (ASX: CSL) share price has been a consistently strong performer on the ASX.

Shares in the Aussie biotech giant climbed 32.53% in the last 12 months and outperformed the S&P/ASX 200 Index (ASX: XJO). But can the Aussie large-cap share repeat the trick in FY21?

Why the CSL share price can climb higher

Despite being a top growth share for many years, I think the Aussie biotech company's value can continue to climb.

For one, the CSL share price hit a new all-time high of $342.75 before the February/March bear market.

Given CSL is currently trading at $287.00 per share, that says to me there is strong growth potential.

The coronavirus pandemic has certainly thrown a spanner in the works for ASX shares and the broader economy. It's tough to value any share at the moment, let alone those in the healthcare sector.

However, I think CSL has some really strong growth initiatives that can strategically position the company in the coming years.

For example, CSL is indirectly involved in the COVID-19 vaccination development effort through its partnership with University of Queensland. The Aussie biotech is also leveraging its blood plasma expertise to try to develop a plasma-derived therapeutic to treat serious complications of COVID-19.

Beyond just the pandemic though, CSL is also continuing to do some great work. The CSL share price in recent years has been built on strong research and development (R&D) and a successful business model.

CSL boasts a team of over 1,700 R&D experts and has innovation partnerships across Australia, Europe and the United States. In fact, CSL invested US$832 million in its R&D portfolio in FY19 or 9.7% of its total revenue. That strong focus on reinvestment and innovation has been a real key to the CSL share price growth in past decades.

The group is currently undertaking some promising work in the treatment of respiratory diseases like asthma. Given the prevalence of these sorts of conditions around the world, the potential addressable market and possible earnings from product breakthroughs are enormous.

Foolish takeaway

I personally think we could see the CSL share price close out this calendar year above the $300 per share mark. Of course, nothing is guaranteed, but it's hard to bet against such an innovative and successful ASX share like CSL.

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Gainers

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 34% on strong earnings growth

Investors just sent this ASX All Ords stock surging 34%. Here’s what’s happening.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Share Gainers

Why Dimerix, Newmont, Regal Partners, and Titomic shares are storming higher

These shares are having a good finish to the week. Let's see why.

Read more »

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

Why Fortescue, Lynas, PEXA, and Regis Healthcare shares are charging higher

These shares are having a strong session on Thursday. But why?

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Gainers

Why Capricorn Metals, Insignia, Perseus Mining, and Qoria shares are storming higher

These shares are having a strong session on Tuesday. But why?

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Amaero, AMP, Block, and South32 shares are racing higher today

These shares are starting the week on a positive note. But why?

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another momentous session for ASX shares this Friday.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why BHP, Catalyst Metals, Mesoblast, and Pilbara Minerals shares are shooting higher

These shares are ending the week with a bang. But why?

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

The Mesoblast share price just rocketed 38%! Here's why

ASX investors just sent the Mesoblast share price up 38%. But why?

Read more »