Why has the CSL (ASX:CSL) share price fallen over $7 in a week?

Shares in the ASX biotech giant have been on the slide lately. We ponder why…

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Shares in global biotechnology company CSL Ltd (ASX: CSL) have slipped from a 3-month closing high of $314.88 on 9 November, finishing Wednesday at $307.43.

The CSL share price has lost more than $7 in that time, leading many to scratch their heads as to why.

There hasn’t been a great deal of price sensitive action out of CSL’s corner lately. However, CSL shares have bounced off their previous low of $286 in October with authority.

That said, it would be an interesting exercise to gauge the sentiment of brokers covering CSL’s share price to see what the experts think.

And for good reason – each of the firms researching CSL shares has made changes to their valuations within the past month.

Let’s take a closer look at what’s leading the charge down south for CSL.

What’s up with the CSL share price lately?

Curiously, when checking the list of analyst ratings provided by Bloomberg Intelligence, there are no sell ratings. As well, the split of buy to hold recommendations is even.

Back in October, several analysts jumped on the share and upgraded their views on its outlook.

For instance, the team at Macquarie Group Ltd (ASX: MQG) re-rated its estimates for the company and upgraded its recommendation to outperform from neutral.

The broker reckons that many of the headwinds CSL has faced this year are starting to fade and, consequently, stuck a $388 price target on its shares.

This sentiment isn’t held amongst all brokers, however. Fellow broker JP Morgan isn’t as rosy on the CSL share price and has a $285 price target on its CSL forward estimates. That target implies a downside potential of 7%.

One interesting factor pointed out by JP Morgan is that a US competitor of CSL reported that plasma collections fell short of company estimates in its quarterly results.

CSL peer Haemonetics Corporation (NYSE: HAE) presented Q2 2022 plasma collection results confirming the “recovery to pre-pandemic collection levels will be a little later than we had assumed in our CSL forecasts”, according to the broker.

JP Morgan cites results from additional companies in the plasma collection space that confirm this trend and outlook.

This is important because CSL is one of only a handful of large plasma collection companies and most of its core business is derived from this avenue.

Other experts have alluded to the effects of COVID-19 on CSL’s earnings. For example, Stuart Welch of Alphinity Investment Management was quoted on Livewire saying that “the key problem [for CSL] during COVID was that the [plasma] donors just weren’t turning up”.

Adding further salt to CSL’s wounds here is that COVID-19 infections are back on the rise in Europe. According to reports from Reuters, coronavirus cases have been on the rise in Europe since September.

Indeed, there have been 565,016 new coronavirus cases in Europe since 9 November, Reuters says. It also states that “of every 100 infections last reported around the world, about 63 were reported from countries in Europe”.

CSL share price snapshot

The CSL share price has struggled these past 12 months, having posted a loss of almost 3% in that time. Yet, despite this, it has climbed 8% in the green since January 1.

Each of these returns have lagged the broad index’s gains. The S&P/ASX 200 Index (ASX:XJO) has returned around 13% in the last 12 months.

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

Before you consider CSL, you'll want to hear this.

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The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

The author Zach Bristow has no positions 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 owns shares of and has recommended Macquarie Group Limited. 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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