Recent months have not been kind to CSL Limited (ASX: CSL) shares.
The biotherapeutics giant's shares have fallen heavily since June and one leading broker believes that they could have finally bottomed.
In fact, Charlie Aitken from Bell Potter thinks "the falling knife is sticking in the valuation floor and it's time to pick it up."
Why now is the time to buy CSL shares
According to a note out of the broker, Aitken highlights that CSL shares are trading on their "lowest relative PE premium to the market since 2017."
In light of this, the analyst feels it is "time to start nibbling in CSL which remains Australia's highest quality global industrial business." Especially with its chair, Dr Brian McNamee, recently reiterating that its intention is to be and remain a growth company for a long time to come.
It is because of this, that Aitken has named the company as his top pick for the month. He said:
My number one idea is accumulating the ultra-high quality CSL. […] McNamee's comments, combined with the reiteration of guidance last week, and arguably peak hysteria on weight loss drugs and some questioning articles in the financial press about CSL's future, all combine with the lowest relative valuation in 6 years to get my attention. I think it's time to start accumulating CSL.
The team at Citi agrees. It has a buy rating and a $325 price target on CSL's shares, which implies a potential upside of approximately 30%.
It recently highlighted that "CSL is trading on a PE FY25 of ~22x, a 6x discount to historical average." The broker also believes that "CSL is winning share [in the United States flu vaccine market] despite the lower vaccination rate."
Overall, quality of this standard doesn't go on sale very often and these brokers are urging investors to take advantage.