The CSL Limited (ASX: CSL) share price could be great value at current levels.
That's the view of one leading broker, which has become even more bullish on the biotherapeutics giant's shares this week.
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What is the broker saying about the CSL share price?
According to a note out of Citi, its analysts have retained their buy rating and lifted their price target on the company's shares to $345.
Based on the current CSL share price of $296.85, this implies potential upside of 16% for investors over the next 12 months.
Why is Citi bullish?
Citi has become even more bullish on CSL following the release of results from industry rivals Grifols and Takeda. Its analysts note that these results are pointing to major improvements in trading conditions for the plasma market.
In fact, everything appears to be falling into place with demand and pricing strengthening and donor costs softening. It is partly for this reason that CSL is the broker's top ANZ healthcare pick.
Citi explained:
Results from Grifols (June HY) and Takeda (June Q) show continued improvement overall in the operating environment for the plasma industry – this is as we anticipated and supportive of our CSL forecasts. The key points from the results were: 1) Demand is very strong, and prices are up mid-single digit, showcasing the pricing power of plasma companies; 2) Plasma collections are now well above pre-covid levels; 3) Plasma donor fees are coming down, helping margins.
CSL is our top pick – Australia/NZ Healthcare.
Outside this, the broker expects "the settlement of the Vifor deal, and a positive outlook on plasma collection at the FY22 result will continue to see the share price outperform over the next 12 months."
All in all, Citi appears to believe that this could make now an opportune time to snap up CSL shares before it is too late.
