S&P/ASX 200 Index (ASX: XJO) share CSL Ltd (ASX: CSL) closed down 0.4% yesterday, ending the day trading for $266.27 per share.
That sees the biotechnology company down 5.6% since the opening bell on 3 January.
As you can see in the chart below, the ASX 200 share came under some selling pressure back on 14 June.
That’s when CSL downgraded its FY23 profit guidance following stiffer-than-expected foreign currency headwinds of around US$230 million to US$250 million. The biotech stock had previously forecast an impact of US$175 million.
Still, CSL estimated FY24 will see a 13% to 18% year on year increase in its net profits after tax and amortisation (NPATA). NPATA is forecast to be approximately US$2.9 billion to US$3 billion at constant currency.
Not bad.
Indeed, according to Rob Crookston, equity strategist at Wilsons Advisory, this ASX 200 share offers some exciting growth opportunities in the years ahead.
Reasons to be bullish on this ASX 200 share
Crookston cited “technological advancements, changing demographics, and increasing global health needs” as reasons he sees investment opportunities in the healthcare sector.
ASX 200 healthcare shares “such as CSL, are well-positioned to benefit from these trends,” he said.
Among the reasons CSL stands out, Crookston said that, “As the world recovers from the COVID-19 pandemic, CSL’s core plasma business, Behring, is well-positioned to benefit from the rebound in plasma demand.”
And an expected increase in profit margins could offer some tailwinds for this ASX 200 share.
“We expect costs to fall over time as collection centres ramp up supply, improving core plasma margins,” Crookston said.
As for the growth outlook, Crookston noted:
CSL’s robust pipeline of new products presents an exciting growth opportunity. As these new products progress through clinical trials and receive regulatory approvals they have the potential to drive future earnings growth and strengthen CSL’s market position.
Then there’s the company’s “commitment to reinvesting in innovation”, which Crookston said “ensures a sustainable competitive advantage”.
According to Crookston:
This reinvestment allows CSL to stay at the forefront of medical advancements and maintain the aforementioned strong pipeline of innovative products. A key reason the company has been able to compound earnings over the long-term.
Wilsons estimates a 17% compound annual growth rate (CAGR) over the next five years for this ASX 200 share, with “earnings upside potential from expected product launches over the coming years”.
Crookston said that with a current 12-month forward price-to-earnings (P/E) multiple of about 28 times, “CSL looks very attractive on a long-term basis.”
