Is the CSL (ASX:CSL) share price too expensive right now?

Let's take a closer look at the iconic Aussie biotech company's share price.

| More on:
A doctor in a white coat sits at her computer with finger on mouth thinking about something in her office with medical equipment in the background.

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 had a rather interesting few years. It was only back in 2019 that CSL shares were at their peak 'growth reputation'. This was a blue chip ASX 200 company that seemed to give investors double-digit price rises year after year. Over the 3 years to February 2021, CSL shares delivered capital growth of approximately 185%.

Perhaps this is why CSL CEO Paul Perreault is now one of the highest-paid ASX CEOs, at least according to a recent article in the Australian Financial Review (AFR).

But the past year and a half has been a different story for CSL. And one shareholders would be pretty unfamiliar with. CSL has seemingly stopped growing.

Yes, the CSL share price has more or less gone nowhere since early 2020. On 17 January 2020, CSL shares were going for almost exactly the price they are going for at the time of writing – $300.40 a share.

The company also remains well below its all-time high of roughly $340 a share that we saw back in February 2020. It's even got quite a bit of headroom with its current 52-week high of $320.42 a share on the current pricing.

So perhaps CSL shares are still too expensive. That might explain why the CSL share price has been stuck in the mud for months now.

Is the CSL share price too expensive?

Well, as my Fool colleague James covered earlier this month, one broker who doesn't think CSL shares are too expensive is Morgans. Morgans put out an 'add' rating on CSL a week or two ago with a 12-month share price target of $324.40 a share. That implies a potential upside of close to 8% over the next year or so.

Morgans remains bullish on CSL due to its recent FY21 earnings report, with the broker impressed by "its full year sales and profits [that] were stronger than expected despite facing tough trading conditions".

However, it does note that the more cyclical forces CSL faces, such as plasma collections and costs, may weigh on the company over the next few years.

At the current CSL share price, this healthcare giant has a market capitalisation of $136.77 billion, a price-to-earnings (P/E) ratio of 42.47 and a dividend yield of 0.98%.

Motley Fool contributor Sebastian Bowen 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

Female pharmacist smiles with a digital tablet.
Healthcare Shares

Are Wesfarmers or Sigma shares a better buy in the pharmacy arena?

These two stocks are both leaders in the industry.

Read more »

A young man goes over his finances and investment portfolio at home.
Healthcare Shares

Down 20%, is the NIB share price undervalued?

Here's what Goldman Sachs is saying about this blue chip stock.

Read more »

four excited doctors with their hands in the air
Healthcare Shares

Sigma Healthcare shares rocket 39% on Chemist Warehouse merger approval

The ACCC doesn't believe the company's merger with Chemist Warehouse will lessen competition.

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

ASX 200 healthcare stock rockets on $75 million news

This marks another positive step for the company.

Read more »

Male doctor in a lab coat working at laptop looking serious.
Healthcare Shares

CSL shares are in the red for 2024. Are they a buy?

Meanwhile, the broader market has extended to new highs this year.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Share Market News

Guess which ASX 300 stock is jumping 11% on big news

Big news is giving this stock an even bigger lift on Tuesday. What's happening?

Read more »

Two lab workers fist pump each other.
Healthcare Shares

Guess which ASX 200 healthcare stock is starting the week with a bang on big news!

What is getting investors excited today? Let's find out.

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

3 small-cap ASX healthcare shares 'with strong prospects'

Fund manager IML discusses why these 3 ASX healthcare shares are likely to rise in value.

Read more »