CSL Ltd (ASX: CSL) shares were under pressure on Tuesday.
Despite initially charging higher following the release of its half year results, the biotechnology giant's shares ultimately ended the session with a 5% decline to $256.96.
While this was disappointing, has it created a buying opportunity? Let's see what two leading brokers are saying.
Are CSL shares a top buy?
With its shares hitting a 52-week low yesterday, both Bell Potter and Goldman Sachs think investors should be jumping on them while they are down in the dumps.
According to a note out of Bell Potter, its analysts have retained their buy rating with a trimmed price target of $335.00 (from $345.00).
Based on its current share price, this implies potential upside of 30% for investors over the next 12 months.
Commenting on its results, the broker said:
Revenue was up +5% but 1% below BPe and VA consensus. NPATA was up +3% to $2.07b but 4% below BPe and VA consensus. The miss at revenue was driven by Seqirus underperformance (-8% on pcp), partially offset by Vifor outperformance (+7%), while Behring (+10%) was in-line.
Bell Potter thinks investors should look beyond Seqirus' poor performance and focus on the improving performance of the key CSL Behring business. It said:
We have lowered our PT to $335 (from $345) but maintain our BUY recommendation. While the declining US flu market has caused headwinds for Seqirus, Behring continues its strong growth outlook and positive margin recovery, which we expect will continue to drive double digit earnings growth for the group over the mid-term.
Goldman remains bullish
A note out of Goldman Sachs reveals that its analysts have retained their buy rating on CSL's shares with a trimmed price target of $318.40. This suggests that upside of 24% is possible for investors from current levels.
Goldman shares a similar view as Bell Potter. It said:
Whilst the miss to CSL Seqirus (-10% vs GSe) was disappointing, we note this segment is navigating challenging market conditions reflected by peers Sanofi and GSK reporting revenue declines of -6% to -15% across the corresponding half. With market share gains unlikely to feature as a lever for growth across the near term, we reduce FY26/27 Seqirus revenue forecasts by -12%.
Ultimately, CSL Behring (68% of group FY25 Gross Profit) remains the key earnings driver for the group and the result reinforced the earnings drivers for this segment are intact.
The broker also highlights that it believes CSL can still deliver on its earnings guidance for FY 2025. It concludes:
With ongoing momentum in IG sales and other products of the CSL's portfolio partially offsetting the weakness to Seqirus, we believe the company is well-placed to deliver on FY25 NPATA guidance (GSe: +12% CC NPATA). Reiterate Buy recommendation.
