CSL (ASX:CSL) share price and 2 other ASX stocks among latest broker "buy" ideas

The CSL Limited (ASX:CSL) share price may not have been a star performer in the post COVID‐19 bounce, but that could soon change.

ASX shares Hand writing Time to Buy concept clock with blue marker on transparent wipe board.

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The CSL Limited (ASX:CSL) share price may not have been a star performer in the post COVID‐19 bounce, but that could soon change.

Shares in the blood products developer dipped nearly 3% since March when the pandemic rattled markets.

It's performance is roughly inline with the S&P/ASX 200 Index (Index:^AXJO), although UBS reckons it could soon outperform.

Shot in the arm for CSL share price

The catalyst is the upcoming flu season in the northern hemisphere. The broker believes this year's season will be worse than normal.

"As at 9 October, 139mn flu vaccine doses had been distributed for the US flu season, up 9% vs. pcp [previous corresponding period]," said UBS.

"CSL noted at their FY20 result they had increased supply into the US of up to ~60mn doses for the 20/21 season (up from ~50mn in pcp, i.e. +20%)."

Broker "buy" rating reaffirmed on positive outlook

It also looks like Europe and the UK are facing a colder than normal winter – perfect conditions for the flu.

The unpleasant experience from COVID-19 should also aid demand for flu jabs. People are more likely to get a shot while governments are increasing their health budgets to pay for flu and coronavirus vaccinations.

UBS reiterated its "buy" recommendation on CSL with a 12-month price target of $346 a share.

Unlocking value key to buy recommendation

The Downer EDI Limited (ASX: DOW) share price is another that could outperform in the near-term. Macquarie Group Ltd (ASX: MQG) believes a potential sale of Downer's mining division will fetch a better than expected price.

The broker's optimism is based on Cimic Group Ltd's (ASX: CIM) divestment of Thiess. The transaction ascribes the business with an enterprise value of $4.3 billion, or 8.1 times forecast pre-tax profit.

If the same multiple was applied to Downer's unwanted asset, the mining business could fetch up to $713 million. This compares to the net asset value of $599 million for the business that is recorded in Downer's FY20 accounts.

Macquarie is keeping its "outperform" recommendation on the stock with a 12-month price target of $5.29 a share.

Strong September quarter supports broker's "buy" call

Meanwhile, Citigroup repeated its "buy" recommendation on the South32 Ltd (ASX: S32) share price after the miner released its quarterly report.

South32 posted record hydrate production at Worsley Alumina. It also remains on track to increase alumina production to nameplate capacity in FY21.

Overall, Citi described the quarterly as a strong report with management sticking to its production forecasts for the current financial year.

South32 also restarted its on-market share buyback as its net cash position increased by US$70 million to US$368 million in the quarter.

Citi's 12-month price target on the stock is $2.60 a share.

Brendon Lau owns shares of CSL Ltd., Macquarie Group Limited, and South32 Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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