The CSL Limited (ASX: CSL) share price has been underperforming in 2021.
Since the start of the year, the biotherapeutics giant's shares have risen just a touch over 1.5% to $289.65.
This compares unfavourably to a 9% gain by the S&P/ASX 200 Index (ASX: XJO) over the same period.
Could the CSL share price hit $325 by the end of 2021?
While the underperformance in the CSL share price has been disappointing, one leading broker appears to see it as an opportunity for investors to buy the shares of a company that would make a great core holding in a portfolio.
According to a recent note out of Morgans, its analysts have an add rating and $324.40 price target on its shares.
Based on the current CSL share price, this implies potential upside of approximately 12% for investors.
As a result, Morgans appears to see potential for the CSL share price to be trading in or around the $325.00 mark come the end of the year.
What did the broker say?
Morgans acknowledges that FY 2022 is going to be a transitional year for the company due to plasma collection headwinds.
It commented: "FY22 guidance is targeting cc NPAT between US$2,150-2,250bn (-9% to -5%) on revenue growth between 2-5%, with management flagging a "transitional year", core plasma products "robust", but margins contracting on increased costs, and Seqirus strength ongoing."
"Plasma collections through FY22 is the key focus and main determinate of margin growth and earnings trajectory into FY23 and beyond, having improved off its nadir (-40%+ last Apr) albeit, not back at pre pandemic levels, on vaccine momentum, CSL initiatives (eg enhanced marketing; new technologies; better donor programs; 40 new collection centres in FY22) and as US COVID stimulus checks ending."
"As such, we view the exact timing of a recovery as uncertain, especially in light of a 9-12 month manufacturing cycle, possibly sticky costs and increasing US restrictions on COVID variants now seen even outside the approaching flu season," it added.
Nevertheless, the broker believes the company is well-positioned for growth once the headwinds ease and remains bullish on the CSL share price.
It concluded: "We view CSL as a core holding and best positioned among its peers to meet growing patient demand, but the near term remains challenged, with timing uncertainty around a full recovery in plasma collections and increasing costs."
