The CSL (ASX:CSL) share price is down 9% in a month, here’s why

This biotech giant’s shares have been out of form recently…

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The CSL Limited (ASX: CSL) share price has been a poor performer over the last few weeks.

Since this time last month, the biotherapeutics company’s shares are down 9%.

This compares to a 1.5% gain by the S&P/ASX 200 Index (ASX: XJO) over the same period.

Why is the CSL share price out of form?

The weakness in the CSL share price over the last 30 days appears to have been driven by a couple of mixed broker notes.

One of those came from the team at Citi on 23 June. Its analysts downgraded CSL shares to a neutral rating from buy on valuation grounds following a period of outperformance. Citi held firm with its $310.00 price target.

A few days later CSL was hit with another broker downgrade. This time it came from the team at Credit Suisse. According to that note, its analysts downgraded CSL’s shares to a neutral rating and cut the price target on them to $310.00.

Credit Suisse made the move on the belief that the market had not taken into account potential margin weakness caused by tough plasma collection conditions. It suspects that the recovery could take longer than expected due to continued pressure on collections, particularly after the US prevented Mexicans from crossing the border to donate.

The broker suspects that the gross margin of its CSL Behring business could fall to 54.1% in FY 2022. This compares to 61.2% in FY 2020.

Is this a buying opportunity?

Given that the CSL share price has now fallen to $277.72, the price targets of both Citi and Credit Suisse offer decent upside of 11.5% over the next 12 months.

In addition, the team at UBS still have a buy rating and $330.00 price target on the company’s shares. This implies potential upside of almost 19% over the next 12 months.

So, while the CSL share price has underperformed over the last 30 days, the next 30 could be more positive. Just as long as its full year results in August don’t contain any nasty surprises.

Should you invest $1,000 in CSL right now?

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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