The CSL Limited (ASX:CSL) share price performed better in April. Could May be even better for the biotherapeutics giant?
The post Here’s how the CSL (ASX:CSL) share price performed in April appeared first on The Motley Fool Australia. –
The CSL Limited (ASX: CSL) share price had a better month during April.
Although it underperformed the S&P/ASX 200 Index (ASX: XJO), it recorded a 2.5% gain over the 30 days.
This means the CSL share price is now down just 5% year to date and up 12% from its March low.
Why did the CSL share price recover in April?
The CSL share price has come under significant pressure over the last 12 months due to concerns over plasma collections.
Plasma is a key ingredient in many of the biotherapeutics company’s therapies such as immunoglobulins and albumin.
It needs to be collected from willing donors on a regular basis via CSL’s widespread collection centres. However, the COVID-19 pandemic has made collections very difficult for a number of reasons.
Chief among them is people staying home during the pandemic to avoid catching and spreading the virus.
In addition to this, given that CSL pays for donating plasma, many donors are doing it for the extra funds. However, with government stimulus putting money into the pockets of these potential donors, there is reduced need to do so.
The problem with this is that lower supply means that the prices being offered to donors has had to increase, leading to potential pressures on margins.
What’s the latest?
The good news for shareholders and the CSL share price is that one leading broker believes this headwind could now be easing.
A note out of Citi last month reveals that it believes plasma collections will return to 2019 levels during the second half of the 2021 calendar year.
This is thanks to the progress of the US vaccine rollout, which has seen an estimated 40% of Americans now having at least one vaccination.
Can CSL’s shares climb higher?
Citi has a buy rating and $310.00 price target on the company’s shares.
Based on the current CSL share price, this implies potential upside of more than 14% over the next 12 months.
This could make it worth considering in May.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.