CSL share price jumps despite JP Morgan's latest caution

Shares in the biotech company finished higher today, in line with the ASX healthcare sector.

| More on:
A group of people in a corporate setting do a collective high five.

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

Key points

  • CSL shares and other healthcare stocks rose by about 1.5% today 
  • CSL recently completed its acquisition of Vifor Pharma 
  • One broker says Vifor may not contribute as much as first thought in FY23 and FY24 

The CSL Limited (ASX: CSL) share price closed Thursday's session up 1.55%, trading at $286.74.

This is in line with the performance of ASX healthcare shares in general today. The S&P/ASX 200 Health Care (ASX: XHJ) finished up 1.6%. The S&P/ASX 200 Index (ASX: XJO) was up 1.44% at the close.

The boost to the CSL share price today comes despite some predictions from top broker JP Morgan regarding CSL's newly-acquired Vifor business.

In a recent note to clients, analyst David Low said the broker had cut its expectations for Vifor's contribution to CSL.

According to The Australian, JP Morgan downgraded Vifor's contribution by 8% for FY23 and 3% for FY24.

After reviewing Vifor's June half accounts, Low said:

We attribute the weaker contribution to the drop in dialysis patients due to 'excess COVID-19 mortality' as reported by Fresenius Medical Care and its key competitor.

While it will take time for patient numbers to recover, we believe this is a short-term issue which was understood by CSL when it bid for Vifor in December 2021.

According to the article, a forecasted boost to CSL's Behring sales and margins in FY24 may offset this. The boost is anticipated due to Mexican plasma donations recommencing after a recent court decision.

So, while the broker expects lower earnings per share (EPS), it retains an overweight rating on CSL stock.

Its 12-month share price target for CSL is $330. That's a potential 14.5% upside on today's closing price.

That's on par with the price target from the team at Macquarie. They're tipping the CSL share price to reach $329.50 this time next year, my Fool mate Brendon Lau reports.

Citigroup is more bullish with a price target of $340 on CSL shares. That would take CSL beyond its pre-pandemic record high of $336.40 per share recorded in February 2020.

According to the AFR article, the biotech will provide an investor briefing on 17 October.

CSL will hold its annual general meeting on 12 October.

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in CSL Ltd. and Macquarie Group Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and JPMorgan Chase. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Healthcare Shares

A man wearing a white coat holds his hands up and mouth open with joy.
Healthcare Shares

ASX All Ords stock rockets 18% on FDA clearance

This stock is making very healthy returns on US news.

Read more »

rising medical asx share price represented by excited doctors dancing in ward
Healthcare Shares

Up 77% in a month! What's going on with the Mesoblast share price?

This stock has blown the lights out in recent weeks...

Read more »

Teamwork, planning and meeting with doctors and laptop for medical, review and healthcare. Medicine, technology and internet with group of people for collaboration, diversity and support in hospital
Healthcare Shares

Guess which ASX healthcare stock is up 31% on big news

What is getting investors excited on Tuesday? Let's find out.

Read more »

Portrait, confidence and team of doctors in the hospital standing after a consultation or surgery. Success, healthcare and group of professional medical workers in collaboration at a medicare clinic.
Healthcare Shares

Healthy gains: 5 best ASX 200 healthcare shares of 2024

Four of the five best-performing ASX 200 healthcare stocks of 2024 more than doubled in value.

Read more »

Scientists working in the laboratory and examining results.
Healthcare Shares

Why did the CSL share price go backwards in 2024?

CSL shares closed out 2024 in the red. But why?

Read more »

Two lab workers fist pump each other.
Healthcare Shares

Guess which All Ords ASX healthcare stock just surged 11% on FDA news

Investors are sending the ASX healthcare stock soaring on Monday.

Read more »

Healthcare Shares

Guess which ASX small cap stock is jumping on 'significant milestone'

This stock is ending the week in style. Let's see what is giving its shares a boost today.

Read more »

Healthcare Shares

Are CSL and this ASX 200 healthcare stock buys in January?

Is now a good time to pick up these shares? Let's see what analysts are saying.

Read more »