Are this healthcare giant’s shares good value?
The post The CSL (ASX:CSL) share price has had a good 6 months. Is it a buy? appeared first on The Motley Fool Australia. –
The CSL Limited (ASX: CSL) share price has bounced back strongly over the last six months.
During this time, the biotherapeutics company’s shares have risen 19%.
This is twice the return of the S&P/ASX 200 Index (ASX: XJO) over the same period.
Where next for the CSL share price?
According to a recent note out of Morgans, its analysts believe the CSL share price is still decent value.
The note reveals that the broker has an add rating and $324.40 price target on its shares at present.
Based on the current CSL share price of $309.36, this implies potential upside of 5% over the next 12 months.
What did the broker say?
Morgans was pleased with the company’s performance in FY 2021 considering the headwinds it faced. The broker notes that both its revenue and profits were stronger than it was expecting.
Its analysts commented: “FY21 results were solid, with better than expected top/bottom line growth and improving OCF, but GM contracted on higher plasma costs. Seqirus was the standout, on strong demand for influenza vaccines, while Behring was more modest, as Albumin gains on transition to a direct China distribution and cost-outs were offset by Ig/Specialty/Haemophilia growth flattish to down.”
However, the broker acknowledges that the near term is uncertain due to plasma collection headwinds.
It explained: “Improving plasma collections are a prelude to a steepening earnings trajectory, but timing is everything, with a lengthy manufacturing cycle (9-12mos), higher costs and ongoing COVID pandemic, adding uncertainty for a quick turnaround.”
Nevertheless, it sees enough quality in the company to maintain its add rating on the CSL share price.
Morgans concluded: “We view CSL as a core holding and best positioned among its peers to meet growing patient demand, but the near term remains challenged, with timing uncertainty around a full recovery in plasma collections and increasing costs.”
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Motley Fool contributor 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 and has recommended 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.