CSL Ltd (ASX: CSL) and ResMed Inc (ASX: RMD) shares are popular blue chip options for investors.
But are they in the buy zone right now?
Let's take a look at what one leading broker is saying about these high-quality companies in January.
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Are CSL shares a buy?
According to a note out of Goldman Sachs, its analysts think that investors should snap up this biotherapeutics giant's shares before they rally.
After several years of underperformance, the broker believes that the company is destined to deliver strong earnings growth through to FY 2028. It said:
Our Buy thesis is driven by (1) Double digit IG growth (GSe: +12.6% FY23-FY28E CAGR) underpinned by low penetration (including CIDP) and ~100bps YoY market share gains. Our channel checks indicate CSL's competitive advantages are intact, with the expansion in fractionation capacity set to enhance CSL's superior cost profile and supply reliability, (2) Strong Gross Margin (GM%) recovery with Behring plasma collection costs per liter set to meaningfully decline (-14.6% FY26E vs FY24), and (3) Rebound in Seqirus growth from depressed US influenza vaccination rates.
Goldman has a buy rating and $325.40 price target on CSL's shares. This implies potential upside of 19% for investors over the next 12 months.
What about ResMed shares?
Goldman also thinks that sleep disorder treatment company ResMed would be a great option for investors right now.
It is bullish on the blue chip due to its huge market opportunity, potential market share gains, and expanding margins. It said:
Our Buy thesis is underpinned by (1) Robust Continuous Airway Pressure Therapy (CPAP) patient growth assisted by growing awareness on Obstructive Sleep Apnea (OSA), (2) Market share gains, particularly in OSA masks and (3) Operating margin expansion driven by product mix and solid cost management.
Goldman also points out that it believes weight loss wonder drugs are not to be feared. It adds:
We believe GLP-1 drugs to treat OSA will co-exist with CPAP therapy based on the published clinical data and payor policies to date. Engagement on RMD's patient app (myAir) indicates ongoing momentum in therapy compliance, noting the potential of the rate of OSA diagnosis to step up from Zepbound's (GLP-1 drug from LLY) Medicare's coverage.
The broker has a buy rating and $48.90 price target on ResMed's shares. Based on its current share price of $38.84, this implies potential upside of approximately 26% for investors over the next 12 months.
