Should I buy CSL shares before this month's earnings update?

Should this healthcare share be in your portfolio this month?

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CSL Limited (ASX: CSL) shares have been positive performers over the last 12 months.

As you can see on the chart below, the biotherapeutics giant's shares are up 15% since this time last year.

This has been driven by improving plasma collection conditions, which is expected to be a big boost to its earnings in the coming years.

a doctor in a white coat makes a heart shape with his hands and holds it over his chest where his heart is placed.

Image source: Getty Images

Should you buy CSL shares before it reports its earnings?

While buying a share before it reports earnings carries risks, that hasn't stopped Morgans from adding CSL's shares to its best ideas list this morning.

According to the note, the broker has put it on its list with an add rating and $312.20 price target.

Morgans best ideas list is home to the ASX shares that the broker thinks offer the highest risk-adjusted returns over a 12-month timeframe supported by a higher-than-average level of confidence. They are also its most preferred sector exposures.

The note reveals that CSL was added to the list this month in the place of Healius Ltd (ASX: HLS). Morgans likes CSL due to its belief that 2023 could be the "break out" year for the company following a tough period during the pandemic. The broker explained:

A key portfolio holding and key sector pick, we believe CSL is poised to break-out this year, a COVID exit trade, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares offering good value trading around its long term forward multiple of 31.5x

Morgans isn't alone with its positive view on CSL's shares. This morning, Morgan Stanley has reiterated its overweight rating and notably higher price target of $354.00.

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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