CSL Limited (ASX: CSL) shares are edging lower for a second day in a row.
Though, longer term shareholders aren't likely to be overly bothered. Since this time last year, the biotherapeutics company's shares are up over 15%.
This compares favourably to a 1.5% gain by the ASX 200 index over the same period.
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Can CSL shares continue to outperform?
The good news is that one leading broker believes that CSL's shares can continue their outperformance over the remainder of 2023.
In response to the company's half years results release earlier this week, the team at Citi has urged investors to pick up shares.
According to the note, the broker has reiterated its buy rating and lifted its price target to $350.
Based on the current CSL share price of $303.61, this implies potential upside of 15% for investors over the next 12 months.
What did the broker say?
Citi was pleased with CSL's half year results and has upgraded its near term earnings estimates partly to reflect a quicker than expected recovery in plasma collections. It is also now expecting a result ahead of guidance in FY 2023.
And with the broker believing that CSL shares should trade at an FY 2025 price-to-earnings ratio of 28x, it believes fair value is now $350. Citi explained:
We increase our FY23-25e NPATA per share (Core EPS) by +1%/+7%/+10% reflecting the faster than expected recovery in plasma collections and higher sales. Our TP moves to $350 (from $335) Maintain Buy. Our TP implies CSL should trade on an FY25 PE of ~28x, in line with the 10-year average. The key risk to FY24 and FY25 remains the pace of recovery of plasma collections, and Behring gross margins. Our FY23 NPATA of US$2,669m is ~2% above the top-end of guidance.
