The “September effect” strikes again.
The post Why did the CSL (ASX:CSL) share price have such a lousy month in September? appeared first on The Motley Fool Australia. –
The CSL Limited (ASX: CSL) share price took a dive late last month, after touching a year-to-date high of $312.99. While the global biotech didn’t release any market-sensitive news, investors appeared to be selling due to the “September effect”.
At yesterday’s market close, CSL shares closed 0.23% lower to $286.67. This puts them within sight of a 3-month low of $273.01.
What’s weighing down CSL shares?
The “September effect” refers to historically underperforming market returns that occur in the United States and other world economies. In fact, the September effect has seen the Dow Jones Industrial Average Index (DJX: .DJI) dip 0.7% on average from 1950 to 2020, while, since 1971, the Nasdaq Composite (NASDAQ: .IXIC) generally dips 0.6% around this time.
Whilst there is no single cause, analysts blame seasonal rebalancing, tax-loss harvesting by mutual funds, and market psychology.
In local markets, the S&P/ASX 200 Index (ASX: XJO) has sunk 3.65% in a month, at its lowest level since June. This has undoubtedly put pressure on the CSL share price, as investors pulled money out to limit potential further losses.
CSL previously noted in its full-year results that it sees FY22 as a transitional year. This reflects strong demand for its portfolio of therapies and vaccines, offset by plasma collection headwinds.
A number of brokers rated the company’s shares following CSL’s FY21 scorecard.
Multinational investment firm Goldman Sachs cut its price target by 1% to $302, while Morgans had a more bullish outlook. The latter raised its 12-month view by 7.7% to $324.40. Based on the current share price, this implies an upside of around 13% on Morgan’s assessment.
CSL share price summary
When looking from this time last year, the CSL share price has moved in circles, registering nil gains. The same can be said for 2021 year to date, where the company has failed to live up to its traditional expectations.
CSL commands a market capitalisation of $130.62 billion, making it the second-largest company on the ASX.
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Motley Fool contributor Aaron Teboneras owns shares of CSL Ltd. 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.