CSL’s shares are under pressure this week. Is it time to buy?
The post The CSL (ASX:CSL) share price is down 8% this week. Is it a bargain? appeared first on The Motley Fool Australia. –
It hasn’t been a good week for the CSL Limited (ASX: CSL) share price.
Over the last three trading sessions, the biotherapeutics giant’s shares have lost 8% of their value.
Why is the CSL share price down 8% this week?
The weakness in the CSL share price has been driven by the broad market selloff, which has been felt particularly hard in the healthcare sector.
For example, while the ASX 200 has fallen 1.95% this week, the S&P/ASX 200 Health Care index has fallen over 7%.
Investors will no doubt now be wondering whether this is a buying opportunity.
Is it time to buy CSL shares?
One leading broker that sees a lot of value in the CSL share price at the current level is Morgans.
According to a recent note, the broker has an add rating and $324.40 price target on the company’s shares.
Based on the latest CSL share price of $286.86, this implies potential upside of 13% over the next 12 months.
Why is Morgans bullish?
Morgans was pleased with CSL’s performance in FY 2021 and particularly the performance of the Seqirus business.
It 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.”
And while the broker acknowledges that plasma collection headwinds are likely to weigh on margins in the near term, it remains positive on its future.
Morgans said: “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.”
All in all, this could make the recent weakness in the CSL share price a buying opportunity for investors.
Should you invest $1,000 in CSL right now?
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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.