CSL Ltd (ASX: CSL) shares are a popular option for Aussie investors and it isn't hard to see why.
The biotech giant has long been regarded as one of the highest-quality businesses on the Australian share market.
However, after a difficult period marked by trade tariff pressures, plasma collection challenges, falling influenza vaccine rates, and cautious sentiment toward healthcare stocks, its share price has fallen a long way from its highs.
CSL shares ended last week trading at $175.08, down materially from their 52-week high of $290.32.
But while 2025 has been disappointing, what could lie ahead for shareholders over the next five years? Let's take a look.
The near-term recovery case for CSL shares
According to analysts at UBS, CSL shares are materially undervalued at current levels. The broker recently put a buy rating and a $275.00 price target on them. That implies almost 60% upside over the next 12 months if the broker is on the money with its recommendation.
Short-term rebounds are one thing, but CSL's real appeal has always been its ability to compound over long periods.
For much of the past two decades, the company delivered double-digit annual earnings growth, supported by rising global demand for plasma-derived therapies and a deep research pipeline.
Let's assume that after its shares reach $275.00 again, CSL gets back to its more familiar rhythm and delivers a return of 10% per annum for the following four years.
That's not heroic by CSL's historical standards, but it reflects a mature, high-quality global healthcare leader delivering solid and steady earnings growth year after year.
If that were the case, a starting share price of $275 growing at 10% per year for four years would rise to roughly $400.
Putting it into perspective
From today's share price of $175.08, a move to around $400 over five years would more than double an investor's money. And that's before dividends.
That equates to an annualised return comfortably above the long-term market average, driven by a mix of valuation recovery and steady compounding.
Of course, this outcome is far from guaranteed. CSL will still need to execute its strategy well, deliver on its cost reductions, and continue innovating in a competitive global healthcare landscape. But if it does what it has done many times before, the next five years could look far brighter than the last couple.
For patient investors, the current weakness may end up being remembered as an incredible opportunity to buy a high-quality stock at a dirt-cheap price. But time will tell if that is the case.
