The CSL Limited (ASX: CSL) share price has been under pressure over the past number of months. We take a closer look at the blue-chip share.
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The CSL Limited (ASX: CSL) share price has been under pressure over the past number of months. This comes despite the company continuing to perform its business operations with COVID-19 in the background.
Since late November, the global biotech’s shares have fallen around 16% in value. Today, CSL shares can be picked up for $266.67 apiece at the time of writing. This reflects an attractive discount for a quality blue-chip company.
Below, we take a look at 3 reasons why the CSL share price could be good value today.
Impeccable growth track record
While CSL shares might be temporarily down from their 2020 highs, the company has been around since 1916. Formerly known as Commonwealth Serum Laboratories, CSL has grown from a small-cap stock to become a global biotherapeutics and vaccine company.
With more than 1,700 scientists working across the world, this biotech behemoth specialises in developing and delivering plasma-derived products for treating serious and rare diseases, as well as being one of the largest influenza vaccine providers.
In its most recent financial report, CSL recorded $5,739 million in revenue, which amounted to a 15% increase over H1 FY21.
To put into perspective how large the company has grown over time, CSL reported $3,056 million in revenue from 5 years ago (H1 FY16). That’s almost double the revenue in just a few short years of the company’s long history.
COVID-19 will pass
No one could have foreseen what 2020 would behold with COVID-19 severely impacting the global economy and affecting everyday lives.
More than 128 million people have been confirmed to have been infected with the virus, representing almost 2% of the entire world population. Although the World Health Organisation said that best estimates indicate roughly 1 in 10 people worldwide may have had the virus.
As the worst may be over with pharmaceutical companies rolling out vaccines hastily to governments, COVID-19 is expected to subside. Experts predict that social norms will gradually return sometime in late 2021 to early 2022.
This could mean that CSL will see its plasma collections return to normal levels as well as the resumption of postponed R&D programs. The company traditionally uses its free cash flow amounts to drive growth through funding its R&D division.
CSL share price weakness
CSL shares have been treading lower in the past year, now trading at almost the same price as recorded in November 2019. The company momentarily reached a high of $320.42 in late November 2020 before trending downwards from there.
The CSL share price hit a 52-week low of $242.00 earlier this month and appears to have bottomed out. Since then, its shares have been on an upwards trajectory.
As one of the ASX market’s largest companies in terms of market capitalisation, the CSL share price is valued at $119.5 billion. Furthermore, the company has more than 455 million shares on issue.
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Aaron Teboneras owns shares of CSL Ltd. 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.