CSL Limited (ASX: CSL) shares have come under pressure recently following a surprisingly disappointing trading update.
It seems that the market was getting ahead of itself and expecting the biotherapeutics giant's COVID recovery to happen quicker than what was actually possible.
But with expectations now reset to realistic levels and its shares trading around the $280 mark, is now the time to pounce?
Are CSL shares good value at $280?
The good news is that now could be an excellent time to buy CSL shares according to the broker community.
I'm not aware of a single broker with a sell rating on its shares. And even the most lukewarm brokers such as Goldman Sachs and Ord Minnett have price targets ahead of current levels.
For example, Ord Minnett has a hold rating and a $315 price target on its shares. This implies a potential upside of almost 12% for investors.
Elsewhere, the bulls at Citi, Macquarie, Morgans, and UBS all have price targets suggesting an upside of at least 15% over the next 12 months.
Citi is one of the more bullish brokers, with its buy rating and $340 price target. It commented:
The trading update was about resetting the market's expectations for the recovery of gross margins in the Behring division, as both donor fees and labour cost inflation remain higher than anticipated. CSL now expects Behring GM to recover to pre-covid levels in 3-5 years (FY26-28) – the market was expecting a sharper recovery by FY26.
We now expect FY27. CSL increased the FX headwind guidance for FY23 and provided FY24 NPATA guidance which was ~12% below VA consensus. We cut our above market FY23-25e NPATA per share (Core EPS) by -4%/-17%/-17% and cut our TP to $340 (from $350). Our TP implies CSL should trade on an FY26 PE of ~27x, in line with the 10-year average. Maintain Buy.
