The CSL Ltd (ASX: CSL) share price has languished in 2024 while the market has flourished.
During the period, the biotechnology giant's shares have lost approximately 3% of their value.
This compares unfavourably to the performance of the ASX 200 index, which is up over 10% year to date. And that excludes the dividends paid over the period, which add somewhere in the region of 4%.
Perhaps the most disappointing part of this is that over the past couple of decades, the CSL share price has built a reputation of being a market-beater.
But we just simply have not seen this since the pandemic for a number of reasons. Since late 2019, CSL's shares have gone sideways.
But those lost years could be a thing of the past in the near future with analysts tipping CSL to find its way again.
Image source: Getty Images
CSL share price tipped to rise strongly
According to a recent note out of Bell Potter, its analysts believe that the company is about to embark on a journey of strong and consistent growth.
In light of this, its analysts feel that the CSL share price is now being undervalued by the market.
Commenting on why it thinks now could be a good time to invest in the company, the broker said:
CSL presents an attractive buying opportunity as we anticipate the start of a margin recovery phase for CSL, driving above-market earnings growth over the next few years. CSL trades at a 12-month forward PE of ~28x, representing a discount to its 10-year average of ~31x. Furthermore, the company will continue to deleverage the balance sheet over the next few years. Given the company's proven quality and growth prospects, we believe significant upside remains.
In our view the stock looks undervalued on a PE ratio 18%/8% below 5yr/10yr historical averages and is set for double-digit earnings growth driven by the core Behring division.
The note reveals that Bell Potter has a buy rating and $345.00 price target on CSL's shares. Based on its current share price of $280.74, this implies potential upside of almost 17% for investors over the next 12 months.
To put this into context, a $5,000 investment in the company would turn into approximately $5,800 by this time next year if Bell Potter is on the money with its recommendation.
Overall, this could make CSL a great option for investors that are wanting to add some high-quality stocks to their portfolio for 2025.
