Out of the five largest companies on the ASX by market capitalisation, CSL Limited (ASX: CSL) shares have performed the worst throughout 2022.
The market went cold on the biotech giant in January as the world was gripped by uncertainty. A month earlier, the company announced it intended to hand over A$17.5 billion to acquire Vifor Pharma in what would be CSL's largest deal in its history.
Fast forward to today, the CSL share price is 2.3% worse off than where it finished up last year. Could the depressed share price be a buying opportunity before 2023? Or, could it be better to avoid injecting this company into your portfolio?
What do the experts think of CSL shares?
Despite the Australian drug developer's rather lofty price-to-earnings (P/E) ratio, a number of brokers and fund managers still like the look of CSL. At the current market rate, the plasmas-derived product maker trades at 40 times earnings.
Nonetheless, the team at Citi holds a buy rating on the company's shares with a $340 price target. This would suggest an additional 17% upside from here. Part of the optimistic perspective relies on CSL's drug development pipeline — something that the Vifor acquisition is believed to further enhance.
Likewise, analysts at Bell Potter hold a positive outlook on CSL amid its latest expansion. The broker also foresees strong and sustained growth in global plasma volumes, increasing at an 8% per annum clip.
Finally, Tribeca portfolio manager Jun Bei Liu shared a bullish perspective on CSL shares a few weeks ago. Liu revealed her expectations that the biotech company will " … grow double digits for the next three years."
Why it could be worth the premium
The success of a company can be influenced by the acumen or ineptitude of its competition. That's why I would take a look at some of CSL's rivals in the industry.
A couple of competitors that come to mind are Grifols (a Spanish plasma-based pharmaceutical player) and Baxter International Inc (NYSE: BAX) (an American healthcare giant focused on areas similar to Vifor).
Of these three companies, CSL has the thickest profit margins… it's not even a close comparison. This would suggest CSL is either a superiorly managed company, holds more valuable intellectual property, operates more efficiently, or a combination of these.
After all, the CSL share price probably wouldn't be up more than 100% over the past five years if it didn't have some edge.
