CSL Ltd (ASX: CSL) shares have slipped into the red over the past month, extending a downtrend that began in August.
The biotech giant's stock has fallen 6.6% during this time, even as the broader market has shown strength and pushed to new highs.
CSL has a long history of paying sturdy dividends and producing consistent earnings growth. But is now the time to consider snapping up CSL shares after this dip? Let's see what the experts think.
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CSL shares push to 3-month lows
CSL shares are trading at their lowest ranges since July this year. One catalyst may have been the broader market's weakness leading into September.
But zooming out, the biotech's share price took a hit following its weaker-than-expected F25 guidance.
The company now expects revenue growth of 5–7% and net profit growth of 10–13% this year, numbers that rattled investors at the time.
So, while it expects to grow, the estimates fell short of what some analysts had anticipated, leading to a sell-off in the stock.
This is an important point. Stock prices are often set based on expectations in the short to mid-term. If expectations change — or a company doesn't meet expectations — the stock price will likely change as well. This happened with CSL shares.
Despite this, CSL's price-to-earnings (P/E) ratio remains elevated at more than 35 times earnings. This suggests investors are paying more than $35 for $1 of the company's profits.
What do brokers say?
Despite the recent weakness, several leading brokers believe that CSL shares could be poised for a recovery.
Bell Potter is one. It has a buy rating on the stock, with a price target of $316.50.
The broker points to CSL's strong track record of capital deployment, its dominant position in the plasma industry, and its pipeline of innovative products as reasons for its bullish outlook.
Bell Potter also highlights that CSL is entering a margin recovery phase, which could drive above-market earnings growth in the coming years.
Meanwhile, Macquarie is also bullish on the stock. The broker has a buy rating on CSL shares, with a higher price target of $330.
As my colleague James pointed out, Macquarie is particularly upbeat about CSL's garadacimab therapy, which could begin contributing to revenue in the near future.
The stock is also rated a buy from consensus, according to CommSec.
Foolish takeaway
CSL shares have been heavily sold since the company posted its FY24 results and F25 guidance. They now rest near three-month lows.
Several brokers continue to see the upside in the stock. CSL has climbed 15.2% in the past year.
