It certainly has been a volatile 12 months for CSL Limited (ASX: CSL) shares.
During this time, the biotherapeutics giant’s shares have had a number of ups and downs.
This has ultimately led to CSL shares recording a modest gain of 4% over the period. This compares to a 25% gain by the S&P/ASX 200 Index (ASX: XJO).
Is it a good time now to buy CSL shares?
One leading broker that believes investors should wait until after its FY 2021 results before considering an investment is Goldman Sachs.
At the end of last week, the broker retained its neutral rating and $305.00 price target on CSL shares.
Based on the current CSL share price of $288.91, this implies potential upside of 5.6% over the next 12 months.
What did the broker say?
Goldman has named CSL as a company that could surprise negatively during earnings season.
It commented: “FY21 result set to be challenging but in itself a minor focus. By reaffirming the FY21 earnings target of +3-8% despite delivering a +25% beat at 1H, CSL guidance points to an earnings decline of 47%-58% in 2H21. Whilst management has likely applied more than its usual degree of conservatism amidst so much uncertainty, it is also clear that the company was having to take tough decisions on customer allocations.”
The broker suspects that cost pressures will persist well into FY 2022 due to plasma collection headwinds.
Goldman explained: “Whilst pricing tailwinds can bridge gaps and mitigate the pressure to a large extent, CSL will be reluctant to assume sustainability of pricing beyond the very near-term, particularly if plasma collections continue to improve as we/they expect. As such, we see scope for cautious commentary on FY22, largely predicated around cost, which may manifest in another year of cautious guidance.”
One positive for CSL shares, though, is that Goldman remains positive on CSL’s longer term future.
Its analysts commented: “Resiliency of demand profile a distinct positive. Longer-term, as Covid pressures continue to ease, we see no reason why IG growth will not recover strongly to double digits. Although FcRn inhibitors look set to be approved in December, we believe the degree of competitive risk is highly manageable, at least for the early indications. Whilst the development of mRNA-based flu vaccines should be a key focus for Seqirus, plasma/Behring will remain the primary attraction for investors (86% of FY22E EBIT).”