Is the CSL Limited (ASX: CSL) share price a buy?
This major ASX healthcare company's share price has fallen around 20% in recent weeks but has kept ahead of the broader S&P/ASX 200 Index (ASX: XJO), which has fallen close to 30% in the same period.
Even so, CSL was one of those high-quality shares that never seemed to dip too hard with an 'always goes up' reputation, leading to a perception that any pullbacks were buying opportunities.
But now there is indeed a significant 'dip', is it time to buy CSL shares today?
Are CSL shares a buy today?
CSL shares are trading at $271.46 at the time of writing, after reaching a new all-time high of $342.75 in mid-February. Even after this pullback, CSL shares are trading on a price-to-earnings ratio of 37.95. Compared to the current market average of 15.59, this is still a very high number.
It's not like this share price is a screaming bargain either. Unlike the ASX banks like Westpac Banking Corp (ASX: WBC) – which is trading at 'depths of the GFC' prices – you could have picked up CSL shares for a similar price in November of last year, when the same share price was making 'record highs'.
Of course, CSL happens to be in the healthcare space and also happens to have a vaccine division as one of its major businesses. These are hardly albatrosses to carry into the market in the midst of a global pandemic disease, so I think a share price premium is somewhat justified in the current environment.
I don't think CSL will feel too much pain from the coronavirus situation either – especially beyond the next 6 months. It manufactures blood medicines and plasma products – not products that are subject to elastic demand.
In the 2009 swine flu pandemic, CSL was called on by the Australian Federal Government to help mobilise the government's vaccine efforts. There is no sign that a similar request will be made of CSL for COVID-19 (as a vaccine hasn't been developed yet). But this remains an open possibility for the company.
Foolish takeaway
I still don't see a huge value opportunity for CSL shares right now, even after the current dip. That said, CSL is still one of the best quality ASX blue-chips on the market today in my opinion, and you could definitely do worse than picking up some CSL shares at the current price.
