CSL Ltd (ASX: CSL) shares have underperformed the market over the last 12 months.
During this time, the biotechnology giant's shares have fallen 2%.
As a comparison, the ASX 200 index has risen approximately 12% over the same period.
Is this underperformance a buying opportunity or should you keep your powder dry for the time being? Let's see what analysts are saying about the company this month.
Image source: Getty Images
Are CSL shares a buy?
With earnings season now well and truly behind us, analysts have updated their financial models and recommendations accordingly.
The good news for shareholders (and potential investors) is that the general consensus is that CSL shares are meaningfully undervalued at current levels.
For example, no fewer than six major brokers have the equivalent of buy ratings on the company's shares with price targets that imply double-digit returns for investors buying at current prices.
One of those brokers is Jefferies, which currently has a buy rating and $338.50 price target on CSL's shares. This implies potential upside of 21% for investors from current levels.
Elsewhere, the team at UBS remains positive on CSL. It responded to the company's half year results lat month by retaining its buy rating with a $330.00 price target. This suggests that its shares could rise a very attractive 18% over the next 12 months.
Anyone else?
Over at Morgans, its analysts are fans of CSL. In fact, they are so positive they have named the company on their best ideas list once again this month. They explain:
While shares have struggled of late, we continue to view CSL as a key portfolio holding and sector pick, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares trading at 25x, a substantial discount (20%) to its long-term average.
Morgans currently has an add rating and $315.40 price target, which offers potential upside of approximately 13%.
Even Citi, which downgraded CSL's shares to a neutral rating last month, has a price target of $305.00, which offers decent 9% upside for investors.
Overall, the broker community appears to see the risk/reward on offer with CSL shares as quite compelling based on where they trade today.
But as always, time will tell if these analysts are on the money with their recommendations with this one.
