The CSL Limited (ASX: CSL) share price was out of form on Wednesday.
The biotherapeutics company's shares fell as much as 6% before recovering to end the day 1.5% lower at $292.50.
This followed the release of a full year result that met expectations but included guidance for FY 2023 that fell short of what the market was expecting.
Is the CSL share price pullback a buying opportunity?
According to a note out of Goldman Sachs, its analysts aren't ready to press the buy button just yet.
This morning the broker retained its neutral rating with a trimmed price target of $291.00.
This is broadly in line with where the CSL share price is trading today.
What did the broker say?
Goldman highlights that the CSL Behring business was the driver of its weaker than expected guidance for FY 2023. It commented:
Plasma collections grew +24% in FY22 (from +18% in 1H22), and whilst this acceleration was widely expected, it underpins the volume recovery through FY23-24E. However, the updates on Behring costs/margins were less assured and were the primary driver of FY23 NPAT guidance falling (3)-(7)% below consensus today (despite another strong performance from Seqirus).
And while the broker suspects that management could be being conservative with its guidance, it also believes it is a reminder that the company is not out of the woods just yet.
On both fronts, CSL would have applied at least its typical dose of conservatism but management now sees the trough in Behring gross margins as 1H23 (from 2H22 previously), a timing-driven downgrade but a material one, reminding investors that the industry is not out of the woods (2H22 margins of 52.5% are -531bps below pre-Covid levels). Staffing pressures and collections costs will remain key challenges through the mid-term, but we see enough tailwinds to drive a sequential improvement from 2H23 (primarily price/mix and improved fixed cost absorption, but also some modest benefit from Rika). Overall, we revise Behring EBIT forecasts by -15%/-2%/-1% through FY23-25E.
All in all, the broker appears to believe investors should wait for the CSL share price to pullback a little more before making a move.
