The CSL share price just hit a multi-year low, is it time to buy?

The healthcare giant is suffering a loss of investor confidence.

| More on:
Shot of a mature scientists working on a laptop in a lab.

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 dropped more than 20% in the last four months. The ASX healthcare share giant is now down around 30% from its pre-COVID high. It's at a multi-year low.

It's lower today than it was during the worst of the COVID-19 crash in March 2020.

CSL is often seen as one of the highest-quality healthcare businesses in Australia, yet it's experiencing a sell-off.

What's happening with the CSL share price?

The company recently held its annual general meeting (AGM) and it wasn't great news. For example, in CSL Behring, the business is seeing a lower profit margin. Dr Paul McKenzie, the CSL CEO said:

We expect CSL Behring gross margin to return to pre-COVID levels in the medium term. The path to margin recovery however is different to the COVID driven margin decline. The largest contributor to gross margin improvement, [is a] reduction in our cost per litre. The biggest components within cost per litre are donor compensation and direct labour. Cost per litre is around 17% off the peak, so we are making genuine inroads, but there is more to do and it's just going to take some time.

There was also a suggestion that new products and improving yields could help the profit margin.

One of the most important things that investors like to judge a business on is the profit it makes.

CSL has guided that for FY24 it's expecting revenue to grow approximately 9% to 11% at constant currency (meaning the same exchange rates).

The business is projecting that underlying net profit after tax (NPATA) will be between $2.9 billion to $3 billion at constant currency, which would be growth of between 13% to 17%, though the growth rate excludes the one-off gain it made from the sale of property in FY23 of $44 million.

There is also a lot of commentary about the potential for the drug Ozempic to have a positive effect on people with kidney disease and related illnesses. CSL is exposed to this through its Vifor acquisition. As my colleague James Mickleboro reported, investment bank Goldman Sachs recently said:

There is a direct link to CSL through the Vifor segment (potentially a direct earnings impact for a company which sells drugs to the kidney disease/dialysis populations, but also potential consequences for the carrying value of the business itself, which is comprised almost entirely of intangible assets and goodwill).

Time to buy?

Warren Buffett once said that investors should be greedy when investors are fearful and fearful when investors are greedy.

Investors may be overreacting by sending the CSL share price as low as it has gone. There are many products in the CSL portfolio, not just Vifor ones, but it'd be a disappointing use of capital if it turns out that Vifor's potential is not as great as first thought. Though, it's possible that Vifor could do better than the pessimists are thinking.

According to analyst ratings collated by Factset, there are 16 buy ratings on CSL, two hold ratings and one sell rating. That's a very bullish group of analysts.

However, another of Warren Buffett's pieces of investment advice is to stay within your circle of competence. In other words, only invest in what you understand.

ASX biotechnology shares, even as one as big as CSL, isn't an area I can claim to have much expertise about, which is why I'm not a shareholder and I don't often say it's worth looking at. To me, there's always a chance in that industry that a competitor could invent a better treatment, and I wouldn't know how to judge the likelihood of that.

The CSL share price may be an opportunity, but it's not the first thing I'd invest in with $10,000.

Should you invest $1,000 in Bitcoin.ℏ right now?

Before you buy Bitcoin.ℏ shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Bitcoin.ℏ wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Goldman Sachs Group. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Healthcare Shares

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Healthcare Shares

Guess which ASX All Ords stock is rocketing 58% on big US news

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

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

3 reasons to buy this quality ASX 200 healthcare share today

A leading expert expects this outperforming ASX 200 healthcare share will keep running hot.

Read more »

A woman reclines in a comfortable chair while she donates blood holding a pumping toy in one hand and giving the thumbs up in the other as she is attached to a medical machine to collect her blood donation.
Healthcare Shares

Brokers tip 4 ASX 200 healthcare shares to buy now

Healthcare is a defensive sector that can provide useful cover for investors when the market is volatile.

Read more »

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

How Trump's tariffs have created 'upside potential' for CSL shares

A leading expert says CSL shares are now looking ‘cheap’.

Read more »

Shot of a young scientist looking stressed out while working on a computer in a lab.
Healthcare Shares

Telix shares crash 8% on US FDA blow

This high-flying stock has been hit with some bad news.

Read more »

A man wakes up happy with a smile on his face and arms outstretched.
Healthcare Shares

ResMed shares jump 8% on strong Q3 update

It was yet another strong quarter from this high-quality company.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Healthcare Shares

Guess which ASX All Ords stock is up 10% on big news

This high-flying stock just can't stop rising. What's going on?

Read more »

Teamwork, planning and meeting with doctors and laptop for medical, review and healthcare. Medicine, technology and internet with group of people for collaboration, diversity and support in hospital
Healthcare Shares

Telix shares rocket 15% on stellar Q1 sales update

Let's see how the company performed during the three months.

Read more »