The CSL Limited (ASX: CSL) share price has fallen around 10% over the last couple of weeks. Could the healthcare giant be a good one to consider for the long-term?
What does the business do?
This is a global biotechnology business that is headquartered in Melbourne. It aims to save lives and protect the health of people who were stricken with a range of serious and chronic medical conditions.
CSL says it develops and delivers innovative biotherapies and influenza vaccines.
Research and development is an important part of the picture for CSL. It has spent US$4.1 billion on R&D investments in the last five years to develop its product pipeline. It has more than 1,700 people committed to its R&D team.
Blood plasma collection is another sizeable element of the business. It has 300 centres across China, Europe and North America.
Do brokers rate the CSL share price as a buy?
There are differing opinions about the healthcare giant.
For example, Credit Suisse has a neutral rating on CSL, with a price target of $315. The broker notes that competition is rising from competitors, which makes it harder for CSL's longer-term growth because of how new plasma collection locations are an important driver for growth. However, it still thinks it can grow profit in the coming years.
Credit Suisse puts the CSL share price at 38x FY23's estimated earnings.
However, Morgans is a bit more positive on the business, with a price target of $324.40 for the CSL share price. The performance of Seqirus was a key feature from the FY21 result for the broker.
FY21 result and FY22 outlook
In constant currency terms, CSL reported 10% growth of both revenue and net profit. The business generated US$2.375 billion of net profit.
Management highlighted that critical operations were maintained during the worst points of the COVID-19 pandemic, demonstrating CSL's resilience and agility. The new distribution model is fully operational in China with sales of albumin now normalised.
Seqirus, the vaccine business, saw total revenue growth of 30%, with seasonal influenza vaccine sales up 41%.
It said that new and extended influenza pandemic agreements had been reached. It also said that the next generation influenza vaccine facility is going to be constructed in Australia.
With its outlook, CSL warned that its margin was easing as a result of increased plasma costs. It sees FY22 as a transitional year as it continues to invest for its long-term strategy.
In FY22 it's expecting to generate net profit of between US$2.15 billion to $2.25 billion in constant currency terms.
What's the market capitalisation at the current CSL share price?
At the current CSL share price, it has a market capitalisation of $131 billion according to the ASX.
