The CSL Limited (ASX: CSL) share price has been underperforming the market again in 2021.
Since the start of the year, the biotherapeutics company's shares have risen 8.5%.
This compares to a 12.5% gain by the S&P/ASX 200 Index (ASX: XJO) over the same period.
Is the CSL share price good value?
One leading broker that believes the underperformance in the CSL share price is a buying opportunity is Morgans.
According to a recent note, the broker has put an add rating and $324.40 price target on its shares.
This compares to the latest CSL share price of $309.08.
What did Morgans say?
Morgans was pleased with CSL's performance in FY 2021, noting that its full year sales and profits were stronger than expected despite facing tough trading conditions. This resilient performance is partly why it remains positive on the CSL share price.
The broker was particularly impressed with CSL's Seqirus business, which smashed forecasts thanks to strong demand for influenza vaccines.
Commenting on the result, Morgans said: "FY21 results were solid, beating on both top (US$10,310m, +10% cc; Morgans US$9,816m) and bottom lines (US$2,375m, +10% cc; Morgans US$2,174m). Seqirus (15% of profit) was exceptional (US$1,736m, +30% in cc, EBIT US$483m, +95%, margin +7.4pp to 27.8%), underpinned by increased sales of seasonal influenza vaccines (+41%; record doses c130m) and ongoing shift to more differentiated products."
What about FY 2022?
Morgans acknowledges that FY 2022 will be a transitional year, with weaker margins, and an expected decline in profits.
It said: "FY22 guidance is targeting cc NPAT between US$2,150-2,250bn (-9% to -5%) on revenue growth between 2-5%, with management flagging a "transitional year", core plasma products "robust", but margins contracting on increased costs, and Seqirus strength ongoing."
However, it remains positive on the long term and believes CSL shares would be a great addition to a balanced portfolio.
It concluded: "We view CSL as a core holding and best positioned among its peers to meet growing patient demand, but the near term remains challenged, with timing uncertainty around a full recovery in plasma collections and increasing costs."
The CSL share price is up almost 200% over the last five years despite its recent underperformance.
