The CSL Limited (ASX: CSL) share price hasn't been getting much love from investors over the last 12 months.
During this time, the biotherapeutics giant's shares are trading broadly flat. This compares to a 21% gain by the S&P/ASX 200 Index (ASX: XJO).
Is this a buying opportunity?
CSL has been operating for over a century. It was founded in 1916 with the aim of servicing the needs of a nation isolated by war. Today, the company is a global giant with a portfolio of therapies and vaccines saving countless lives across the world.
One of the keys to its success has been the company's high level of investment in research and development. Every year CSL invests approximately 10% to 12% of its sales revenue back into its these activities. This has helped ensure that CSL is at the forefront of innovation and has a pipeline of potentially lucrative products.
Unfortunately, the company has been struggling with plasma collections during the pandemic. This is because lockdowns, social distancing, and government stimulus payments have all had negative impacts on donations.
Given that plasma is a core ingredient in many of its therapies, lower collections is bad news for CSL and is expected to drive costs higher. However, the good news here is that this headwind is only expected to be short-lived. In fact, recent data reveals that collections are already rebounding strongly and have been tipped to reach pre-COVID levels later this year.
In light of this, with the CSL share price still trading notably lower than its 52-week high, now could be an opportune time to make a long term investment.
Who rates the CSL share price as a buy?
One broker that thinks the CSL share price is in the buy zone is Citi.
It recently retained its buy rating and $310.00 price target. The broker believes that recent industry trends are looking favourable for the company.
Citi explained: "Over the last few weeks, most of CSL's listed competitors have reported results. When we look at the data overall, it points to an improvement in the rate of plasma collection in April, which has been the main impediment to growth throughout the pandemic."
"It also points to continued strong demand for the end-product, in particular IG. Overall this gives us confidence in our Buy call on CSL, although we are yet to see the earnings trough for the company which will occur in FY22 given the long lead times from plasma collection to sale."
