BoA Merrill Lynch has upgraded CSL to Buy from Neutral with a target price of $71.25 (currently $64.66). The broker believes the plasma group can grow earnings at a higher-rate than consensus given increasing scale in plasma, entry in Japan and a new product for the US. Although CSL trades at a high PE of 25.97, it has consistently justified this with solid demand and earnings growth. The broker has also tipped CSL to launch a $900m-plus share buyback later this year given strong cash flow generation and the need to keep its leverage ratio within range of 0.7-1.2 times.
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