Should you jump on CSL shares while they're trading around 52-week lows?

The CSL share price fell to a new 52-week low of $255.87 earlier this week.

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Key points
  • The CSL share price fell to a new 52-week low of $255.87 on Monday
  • This may be a golden buy-the-dip opportunity for ASX 200 investors 
  • Several top brokers say the CSL share price will rise by between 17% and 29% in FY24 

The CSL Limited (ASX: CSL) share price fell to a new 52-week low of $255.87 on Monday.

The ASX 200 blue chip share is already recovering and closed at $264.57 on Tuesday.

Is this a prime buy-the-dip opportunity staring us in the face?

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Image source: Getty Images

What's dragging the CSL share price down?

The ASX 200 healthcare giant is underperforming its sector index so far this year.

In 2023, the CSL share price is down 6.1%.

The S&P/ASX 200 Health Care Index (ASX: XHJ) is down 1.5%.

The S&P/ASX 200 Index (ASX: XJO) is up 4.9%.

CSL's decline to a 52-week low follows an update that disappointed market analysts last month.

As my Fool colleague Bernd reported, CSL is now expecting a foreign currency headwind of US$230 million to US$250 million in FY23. That's higher than the previous estimate of US$175 million.

The constant currency profit guidance for FY23 was unchanged. In fact, CSL reckons it can probably get to the top end of it.

But the company foreshadowed some challenges in FY24.

As a result, CSL now expects profit growth of about 13% to 18% in FY24. In dollar terms, that will be a range of US$2.9 billion and US$3 billion in constant currency.

Market analysts had been expecting better news, and the CSL share price fell 6.9% on the day as a result.

However, as long-term investors know, ASX 200 blue chip stocks are not immune to short-term operational hurdles and market upsets.

In fact, it could be argued that such short-term difficulties provide wonderful buying opportunities.

Let's look at it this way.

If you'd bought CSL shares when they first floated in 1994 at $2.30 per share, would you be rattled by a profit growth projection of 13%-18% in FY24 that is below market expectations?

Would a new 52-week low of $255.87 freak you out after 11,024% growth over the past 30 years?

Brokers predict 17%-29% growth for CSL shares in FY24

CSL shares have a lot of support among the brokers right now.

Looking ahead, many of them think CSL shares are primed for growth in FY24.

CLSA is the latest broker to upgrade its rating on CSL shares. It has raised CSL to a buy rating with a 12-month share price target of $313, implying an 18.3% potential upside.

Jefferies also recently raised CSL shares to a buy with a $318 price target. That's a potential 17.6% upside.

Citi is the most bullish of the brokers. It has a buy rating and share price target of $340 on the ASX 200 biotech. This implies a very healthy 28.5% potential upside.

According to the Australian Financial Review (AFR), UBS retained the same price target as Citi yesterday following a report from a CSL competitor.

Macquarie has an outperform rating with a $326 price target. That's a 23.2% potential upside.

Morgans says CSL shares are "poised to break out this year" and has an adding rating on the stock with a $323 price target. That's a 22.1% potential upside.

Are healthcare shares a safe haven in today's economy?

As we recently reported, Elston portfolio manager Leon de Wet thinks CSL shares are among three ASX 200 shares "that should perform regardless of economic conditions".

The Elston team has recently increased its exposure to non-cyclical shares like CSL.

Fidelity's Zara Lyons also says healthcare shares are a defensive play in today's inflationary economy.

Lyons likes CSL for its "diversified portfolio of assets with strong market positions and solid underlying demand".

She also cites "attractive assets in its pipeline", including CSL112 which improves cholesterol efflux capacity. Top-line results of a phase three clinical trial are due at the end of FY24.

Lyons says:

The company has seen a slower recovery in margins post pandemic, due to several factors including wage inflation, donor fee inflation, costs associated with capacity expansion and costs associated with the rollout of plasma donation system RIKA across its collection centres.

However, some of these costs will normalise in time, and we expect yield improvements to materialise in the longer term.

By the way, if you buy $10,000 of CSL shares now, we can tell you how much passive income you will receive through dividends.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in CSL and Macquarie Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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