$300 CSL SOON., page-139

On the other hand:

Morgan Stanley analysts say CSL Limited (ASX : CSL) shares could top $350 if their bull case for the company eventuates. Currently trading at over $280, shares in CSL are up nearly 50% since a year ago.

CSL’s market capitalisation
At $350 a share, the market capitalisation of CSL (currently more than $127 billion) would be higher than that of the Commonwealth Bank of Australia (ASX: CBA), which has a market capitalisation of nearly $143 billion. According to The Australian, Morgan Stanley predicts that a scarcity of growth in the large-cap sector of the ASX will help push CSL’s price higher.

The bull case
“Given CSL’s superior ASX relative size, liquidity and growth . . . The market will continue to price delivery of bull case scenarios and longer-term disruption risk will be ignored,” Morgan Stanley said in a note to clients.

The broker has increased the weighting of its bull case from 40% to 45% and reduced the weighting of its bear case from 10% to 5%.

Morgan Stanley’s bull case assumes trials in CSL’s heart attack therapy (CSL 112) go to plan, its haemophilia medicines reach US$1 billion in revenue a year, its HAE franchise reaches US$1 billion in revenue, and efficiency gains of US$70 million a year are realised in plasma centres. The broker has lifted its price target to $290 and remains overweight due to near-term momentum.

Earnings growth
According to The Australian, Morgan Stanley expects a 3-year earnings per share compound annual growth rate of around 13% for CSL. Strong immunoglobulin growth and lower flu returns are predicted to contribute to 2020 net profit at the top end of guidance.