CSL Limited (ASX: CSL) shares have been having a rough time in recent weeks.
Despite pushing higher today, the biotherapeutics giant's shares are still down 5% since this time last month.
As a comparison, the S&P/ASX 200 Index (ASX: XJO) has risen approximately 1.5% over the same period.
Should you buy CSL shares?
The team at Citi appear to believe that CSL shares are trading at an attractive level.
According to a recent note, the broker has a buy rating and $340.00 price target on the company's shares.
Based on where its shares are trading at today, this implies potential upside of over 22% for investors over the next 12 months.
Citi is also expecting a modest 1.4% dividend yield in FY 2023, stretching the total potential return to almost 24%.
Why buy shares?
Citi is positive on CSL due to the improved trading conditions in the plasma industry. The broker explained this in a note last year following the release of updates from its rivals. It said:
Results from Grifols (June HY) and Takeda (June Q) show continued improvement overall in the operating environment for the plasma industry – this is as we anticipated and supportive of our CSL forecasts. The key points from the results were: 1) Demand is very strong, and prices are up mid-single digit, showcasing the pricing power of plasma companies; 2) Plasma collections are now well above pre-covid levels; 3) Plasma donor fees are coming down, helping margins.
The broker has since commented on the acquisition of Vifor Pharma, which completed last year. It commented:
The inaugural Vifor investor day was largely as anticipated. CSL gave investors a better appreciation for the rationale behind the deal: Vifor has the most extensive suite of products available in a large underpenetrated market, with a limited number of competitors, and unique industry partnerships.
All in all, its analysts are expecting the company to grow its earnings per share by 20% in FY 2023, then 23% in FY 2024, and 15.9% in FY 2025. This means CSL shares are changing hands at just 24x FY 2025 earnings, which Citi appears to believe makes them great value today.
