Are CSL shares good value at current prices?

Is this blue chip a star buy for 2024? Let's see what analysts are saying.

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CSL Limited (ASX: CSL) shares have had a subdued year.

As things stand, the biotechnology company's shares are on course to end the year with a 1% decline.

This compares to a gain of approximately 8% for the ASX 200 index.

Should you buy CSL shares?

A couple of leading brokers believe that investors should be buying CSL shares at current prices.

The first is Goldman Sachs, which has a buy rating and a $309 price target on the company's shares. This implies a potential upside of 8% for investors over the next 12 months.

Goldman believes that the worst is behind the company and it is about to enter a very positive period. It said:

CSL is now entering a period of more capital-efficient growth, driving a sharp improvement in ROIC (+460bps by FY27E). This positive inflection also coincides with a period of historically-high earnings growth (+14% CAGR FY23-27E vs. +9% pre-Covid i.e. FY15-19) driven by core plasma franchise (Behring) margin recovery.

Over at Citi, its analysts are even more positive and have a buy rating and $325.00 price target on the company's shares. This suggests a potential upside of 14% for investors between now and this time next year.

Its analysts note that a recent investor day event from a rival was supportive of its bullish view on CSL's shares. It explains:

We attended Takeda's virtual Plasma-Derived Therapies (PDT) investor event. Takeda is expecting mid-to-high single digit volume growth for Immunoglobulin (Ig) over the medium-term despite the competition from FcRns – this is in-line with CSL's expectations and our forecasts. Takeda anticipates the impact of anti-FcRn to be limited to <10% of total IG market.

Takeda disclosed for the first time its plans to expand manufacturing capacity by 50% over the next 5 years, a sign of its positive outlook for Ig demand.

All in all, while 2023 has been a bit of a disappointment, all that could change in 2024 if these brokers are on the money with their recommendations.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in CSL. 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.

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