CSL was the market darling for the decade before COVID but as so often occurs investors started to only focus on the quality of the business as opposed to the fair value of its shares hence the 30% correction since early 2020 as the crowded trade again proved to be a dangerous place to be invested. We bought into the stock’s pullback in early 2021, it’s been a fairly long journey for only a +6% paper return thus far.
The healthcare giant has suffered like many growth stocks at the hands of rising bond yields and a rerating of high valuation stocks but we feel as bond yields look set to enter a period of relative calm a rally towards ~$300, or 10% higher is a strong possibility – CSL is currently trading on a P/E of 38x making it hard to envisage significant gains above $300 until interest rates start to roll over.
MM is bullish & long CSL initially looking for a test of $300
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