credit suisse - $40.50, page-36

Citi 26/03/2010 1 Buy, Medium Risk $40.26 11.4%

The market is forgetting to price in the upside potential stemming from the use of IVIG to treat Alzheimer's disease, Citi analysts argue in a general update. Competitor Baxter has been releasing positive clinical trials recently and the analysts are not surprised at all. They expect to see more positive outcomes and trials.

To put a figure to the potential upside from Alzheimer's: industry estimates, report the analysts, put expected extra-demand at US$4bn of revenue however, more optimistic estimates put it at 5-10x this. That's a lot of potential upside by anyone's measure. It's enough for Citi to reiterate its Buy rating.

In addition, the analysts believe the shares remain attractively priced, despite the outlook for only circa 2% underlying EPS growth in FY11. FY10 should see EPS growth in the order of 15%, FY12 should see 18% growth. Citi analysts see potential upside to these projections though.

Target price is $40.26 Current Price is $36.08 Difference: $4.18
If CSL meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).