The CSL Limited (ASX: CSL) share price has been having a subdued week.
After charging higher following its FY 2023 results release last week, the biotherapeutics company's shares have now given back the majority of its gains.
While this is disappointing, it could prove to be a great buying opportunity for investors if Citi is on the money with its recommendation.
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What is Citi saying about the CSL share price?
According to a recent note, its analysts have a buy rating and a $325 price target on the company's shares.
Based on the current CSL share price of $263.85, this implies a potential upside of just over 23% for investors over the next 12 months.
The broker is also forecasting a modest 1.6% dividend yield in FY 2024, which boosts the total return to approximately 25%.
What did the broker say?
Citi was pleased with the company's results and guidance for FY 2024. It also highlights that immunoglobulins demand is expected to remain strong and that the CSL share price would be trading in line with its 10-year average multiple if it rose to the broker's price target. It explains:
The FY23 was as pre-announced and the FY24 NPATA guidance was maintained. The new information was 1) CSL expects Ig sales to grow at HSD over the long term, driven by PID, SID and CIDP despite the incoming competition from FcRns, 2) strong Ig sales growth is expected in FY24 (mid-teens vol. + MSD pricing), 3) disclosure of timeline and magnitude of the expected Ig yield improvement, 4) ~30% decline in capex in FY24.
CSL still expects Behring GM to recover to pre-covid levels in 3-5 years, with the improvements back-end weighted (FY26-28) and multi-faceted (lower cost per litre, new products, mix shift, yield improvements). We adjust our FY24-25e NPATA per share (Core EPS) by 0%/-3%. Our new TP of $325 (from $340) implies CSL should trade on an FY26 PE of ~26x, in-line with the 10-year average. Maintain Buy.
