The ASX may be packed with high-quality businesses, but few are held in the same regard as CSL Ltd (ASX: CSL).
This biotherapeutics giant has been one of the crown jewels of the Australian share market for decades. But right now, CSL shares are trading 23% below their 52-week high — and that could spell opportunity for long-term investors.
Why is CSL an Aussie stock to buy and hold?
CSL is one of the world's largest and most advanced plasma fractionators, responsible for producing vital treatments that are difficult to replicate through other means. These therapies play an essential role in treating immune deficiencies, bleeding disorders, and neurological conditions.
The team at Bell Potter recently commented on what it likes about CSL. It said:
CSL is one of the world's largest global plasma fractionators. The plasma products themselves have proven excellent medical products, with wide application, and deliver therapeutic outcomes difficult to achieve by other means.
It is not just the science that makes CSL an elite operator — it is also the execution. Over the past 25 years, the Aussie stock has built a track record of deploying capital wisely and consistently generating high returns for shareholders.
What's behind the share price weakness?
Despite its impressive pedigree, CSL hasn't been immune to the broader volatility in healthcare stocks. Concerns over US President Trump's policies and a slower-than-expected margin recovery have weighed on the share price in recent times.
The result? CSL shares are now trading at just 22 times forward earnings, well below their 10-year average PE ratio of 31. That's a sizeable discount for a business of this calibre.
And this comes at a time that many analysts are forecasting double-digit earnings growth from the Aussie stock. Bell Potter said:
CSL presents an attractive buying opportunity as we expect the margin recovery phase for CSL to drive above-market earnings growth over the next few years. CSL trades at a 12-month forward PE of ~22x, representing a discount to its 10- year average of ~31x.
Furthermore, the company will continue to deleverage the balance sheet over the next few years. Given the company's proven quality and growth prospects, we believe significant upside remains.
Speaking of upside, Bell Potter has a buy rating and $335.00 price target on CSL shares. Based on its current share price of $240.85, this implies potential upside of almost 40% for investors over the next 12 months.
A stock to buy and hold forever?
CSL operates in an industry with high barriers to entry, mission-critical therapies, and growing global demand. Combine that with a healthy pipeline, ongoing investment in innovation, and a rock-solid balance sheet that's steadily being deleveraged, and you've got a formula for long-term compounding.
For patient investors looking for a world-class Aussie stock to tuck away for the next decade or more, this 23% pullback may well be one of the better opportunities on the ASX right now.
