The CSL Ltd (ASX: CSL) share price sold off sharply earlier this week but has since staged a recovery.
At Friday's close, the biotech giant was trading at $308 per share, up more than 4% over the past month.
Analysts believe the biotech giant could end the year on a high note. Here's what I see for the CSL shared based on the expert's opinions.
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Why CSL could finish strong in 2024
CSL is one of the best-known stocks on the ASX, so any information or updates on the company are usually digested fairly quickly.
And while things have been quiet from the company's end lately, it's been anything but from the crowd of analysts covering the stock.
Bell Potter recently issued a buy rating with a price target of $327.42 on the CSL share price.
According to my colleague James, the broker reckons that CSL's current share price offers an attractive entry point, especially compared to historical averages.
At the time of its report, CSL was trading at a forward price-to-earnings (P/E) ratio of around 28 times. This is below its 10-year average of 31 times and well under its five-year average of 35 times, Bell Potter says.
The broker notes this disconnection could create a solid buying opportunity, adding that CSL might be on the verge of a "margin recovery phase".
Macquarie also has a buy rating on CSL, with a price target of $330, whilst consensus also sees it as a buy, according to CommSec.
Fundamentals shine amid volatility
CSL stands out as a 'sleep-well-at-night' (SWAN) stock in the healthcare sector, in my opinion.
Healthcare is a defensive industry, and companies like CSL tend to be resilient during economic downturns. For instance, during the COVID-19 recession, CSL continued to deliver steady revenue, showcasing its stability.
Another strength is CSL's long history of generating high returns on capital. In the first half of FY24, CSL reported an 11% increase in revenue to US$8.05 billion. Net profits were up 20% to US$1.94 billion.
CSL's financial position is expected to strengthen further. Bell Potter anticipates that CSL will continue to reduce its debt.
Meanwhile, UBS forecasts earnings per share (EPS) are expected to reach roughly AUD$9.45.
Here I will take a more conservative P/E ratio than where CSL trades today of 35 times. If investors pay this multiple, this could see the CSL share price rise to around $330 per share by year-end.
If they continue paying the current 38 times, the share price could be $359, according to UBS' estimates (38 x 9.45 = $359).
CSL share price snapshot
Based on broker opinions and a range of valuation multiples, my estimation is that the CSL share price could trade between $330 and $359 per share by the end of this year.
CSL shares are up 16% in the past 12 months.
