One of the best ways to build long-term wealth is by buying high-quality companies when they're out of favour.
Right now, I believe there's a golden opportunity with biotech giant CSL Ltd (ASX: CSL), a company I already own and consider one of the highest-quality businesses in the world.
With its share price down 11% year to date, I'm seriously considering adding to my position.
Why has the CSL share price fallen?
CSL's recent weakness has been driven by two key factors: broad market weakness and a slightly disappointing half-year result. While its key CSL Behring plasma therapies business delivered strong growth, this was offset by a weaker-than-expected performance from its Seqirus vaccine division.
Seqirus struggled due to a declining US flu market, which weighed on overall revenue growth. However, this is likely to be a short-term headwind rather than a structural issue.
Furthermore, the long-term fundamentals of CSL's core plasma business remain firmly intact, and that's what really matters.
What do the brokers think about this ASX growth stock?
Despite the recent weakness, leading analysts remain bullish on CSL.
Bell Potter has a buy rating and $335.00 price target on its shares. I notes that while Seqirus is facing headwinds, CSL Behring's strong growth and margin recovery should drive double-digit earnings growth over the mid-term.
Goldman Sachs also reiterated its buy rating with a price target of $318.40. It stated that CSL Behring remains the key earnings driver and leaves the company well-positioned to deliver 12% constant currency NPATA growth in FY 2025. And while the broker acknowledges the challenges in Seqirus, it pointed out that major peers Sanofi and GSK also reported revenue declines in the segment, suggesting industry-wide pressures rather than company-specific issues.
Should I buy more CSL shares?
When a high-quality stock like CSL is down due to temporary challenges, it presents an opportunity rather than a reason to panic. Investing in great ASX growth stock when they're out of favour and holding for the long term is one of the best ways to grow your wealth.
CSL has a proven track record of compounding earnings and delivering strong shareholder returns. Its plasma therapies business is a leader in a market with significant barriers to entry, and its long-term growth drivers—including increasing immunoglobulin demand and R&D investments—remain as strong as ever.
While there are short-term challenges, the company's fundamentals are rock-solid. And based on broker targets, the CSL share price is trading at a significant discount to its fair value, with potential upside of over 30% from current levels.
Foolish takeaway
For investors with a long-term mindset, buying market-leading businesses when they're down can be incredibly rewarding. With CSL's share price struggling despite its strong core business, I believe this could be a great time to top up my position and take advantage of the market's short-term pessimism.
Patience is key when investing in high-quality stocks, and history shows that those who buy during temporary weakness are often the ones who reap the biggest rewards.
