The CSL (ASX:CSL) share price is down 9% in a month, here's why

This biotech giant's shares have been out of form recently…

| More on:
asx share price fall represented by woman shrugging

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The CSL Limited (ASX: CSL) share price has been a poor performer over the last few weeks.

Since this time last month, the biotherapeutics company's shares are down 9%.

This compares to a 1.5% gain by the S&P/ASX 200 Index (ASX: XJO) over the same period.

Why is the CSL share price out of form?

The weakness in the CSL share price over the last 30 days appears to have been driven by a couple of mixed broker notes.

One of those came from the team at Citi on 23 June. Its analysts downgraded CSL shares to a neutral rating from buy on valuation grounds following a period of outperformance. Citi held firm with its $310.00 price target.

A few days later CSL was hit with another broker downgrade. This time it came from the team at Credit Suisse. According to that note, its analysts downgraded CSL's shares to a neutral rating and cut the price target on them to $310.00.

Credit Suisse made the move on the belief that the market had not taken into account potential margin weakness caused by tough plasma collection conditions. It suspects that the recovery could take longer than expected due to continued pressure on collections, particularly after the US prevented Mexicans from crossing the border to donate.

The broker suspects that the gross margin of its CSL Behring business could fall to 54.1% in FY 2022. This compares to 61.2% in FY 2020.

Is this a buying opportunity?

Given that the CSL share price has now fallen to $277.72, the price targets of both Citi and Credit Suisse offer decent upside of 11.5% over the next 12 months.

In addition, the team at UBS still have a buy rating and $330.00 price target on the company's shares. This implies potential upside of almost 19% over the next 12 months.

So, while the CSL share price has underperformed over the last 30 days, the next 30 could be more positive. Just as long as its full year results in August don't contain any nasty surprises.

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.

More on Healthcare Shares

Two scientists in a Rhythm Biosciences lab cheer while looking at results on a computer.
Healthcare Shares

2 ASX healthcare shares having a stellar run today

The ASX healthcare sector is down today but these two stocks are bucking the trend.

Read more »

A company manager presents the ASX company earnings report to shareholders at an AGM.
Healthcare Shares

Why this $13 billion ASX 200 healthcare stock is surging today

A change in sentiment for the healthcare player.

Read more »

Shot of a scientist using a computer while conducting research in a laboratory.
Healthcare Shares

This ASX 200 stock hit a 52-week low and a top broker thinks it can rebound

Patient investors may see this stock make a pleasing recovery.

Read more »

A couple smile as they look at a pregnancy test.
Healthcare Shares

Why this sold-off ASX healthcare share could be an exciting dividend buy

This could be a healthy stock for dividends.

Read more »

a smiling woman sits at her computer at home with a coffee alongside her, as if pleased with her investments.
Healthcare Shares

Is CSL the best ASX 100 share to buy now?

Bell Potter has good things to say about this blue chip star.

Read more »

Scientists in a laboratory look at a computer screen with anticipation on their faces representing a potential change in the performance of ASX biotech shares in FY23
Healthcare Shares

Down 10% in a month, are CSL shares feeling the sting of a potential disruption?

Brokers are still bullish.

Read more »

One girl leapfrogs over her friend's back.
Healthcare Shares

Doubled in a year! Does this booming ASX share have another 24% upside?

Let's take a look.

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Healthcare Shares

This ASX All Ords share is diving 18% as inflation pain draws blood

This healthcare company delivered a trading update at its annual general meeting today.

Read more »