Are CSL shares a bargain buy with big return potential?

Is CSL a blue-chip bargain and destined to deliver big returns for investors.

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CSL Limited (ASX: CSL) shares dropped with the market on Thursday.

The biotherapeutics giant's shares ended the day almost 1% lower at $234.34.

This latest decline means that its shares are now down over 25% from their 52-week high.

Are CSL shares in the bargain bin?

A number of brokers believe there could be some big returns on the cards for CSL shares over the next 12 months.

For example, last week the team at Citi reiterated its buy rating and $325 price target on its shares. This implies a potential upside of approximately 39% for investors over the next 12 months.

Citi believes CSL is well-positioned to deliver strong earnings growth through to FY 2028. It said:

CSL remains confident in its ability to generate double-digit EPS growth over the medium-term, in-line with consensus/Citi forecasts of 14%/15% EPS CAGR over FY23-28e.

In light of this, the broker feels that its shares are undervalued at current levels. Citi notes that "CSL is trading on a PE FY25 of ~23x, a 5x discount to historical average."

What else is being said?

Over at Morgans, its analysts retained their add rating and $328.20 price target on CSL's shares last week. This implies over 40% upside for investors from current levels. It commented:

Management expressed confidence in CSL's resilience (ie no material impact from GLP-1s) and competitive advantages in scaled operations, reiterating FY24 guidance and calling for annual double-digit earnings growth over the medium-term.

This growth is underpinned via a leading position in large, growing markets, and focus on improving plasma yields, lowering costs, a disciplined approach to digitalisation, and new drug launches to improve Behring GMs (3-5 years to pre-COVID levels), with ROIC improving over time.

Elsewhere, Macquarie has an outperform rating and $321 price target, Morgan Stanley has an overweight rating and $334.00 price target, and UBS has a buy rating and $340.00 price target.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended CSL and 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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