CSL Ltd (ASX: CSL) shares have had a brutal year, and that has put the global biotechnology leader firmly back on investors' radars.
Ending the week at $175.53, the company's shares are trading a long way below their 52-week high of $282.20.
For a business that has long been regarded as one of the highest-quality companies on the ASX, that sort of pullback naturally raises an important question. Is this a rare long-term buying opportunity, or are the risks still too high?
Why CSL shares have fallen so far
The sell-off hasn't happened without reason. Over the past year, CSL has been dealing with a combination of short-term headwinds that have weighed heavily on sentiment.
The biggest issue has been ongoing weakness in US influenza vaccination rates. This has directly impacted the company's Seqirus division and led management to downgrade constant-currency guidance for FY 2026. Revenue growth expectations have been trimmed to 2% to 3%, with net profit after tax also revised lower at the midpoint.
At the same time, CSL flagged softer demand for albumin in China, linked to government cost-containment measures. While management believes it can largely offset this impact in the first half of FY 2026 through mitigation strategies, it has added another layer of uncertainty to the near-term outlook.
Together, these factors have also delayed the planned demerger of Seqirus, which had previously been expected this year. That delay disappointed investors who were hoping for a clearer path to unlocking value.
Is the market being too pessimistic?
Despite those challenges, a number of analysts believe the market may have pushed its pessimism too far.
One of those is Morgans. While the broker has reduced its earnings forecasts through to FY 2028 and cut its valuation, it still has a buy rating on CSL shares with a price target of $249.51. From current levels, that implies upside of more than 40%.
Importantly, the broker argues that the risk of a permanently lower base for US flu vaccinations is being over-priced. In its view, Seqirus and Vifor have been marked down heavily, and even its core plasma business, CSL Behring, is now trading below peers and well under its long-term valuation averages. It said:
Although it remains challenging to know when US influenza vaccination rates will stabilise, we believe the risk of a permanently lower base is being over-priced, with Seqirus and Vifor marked down, with even Behring trading below peers and well under its long-term average, which we see as unjustified. We lower FY26-28 net profit forecasts by up to 14.3%, with our PT decreasing to A$249.51 (from A$293.83). BUY.
For long-term investors, that disconnect between short-term uncertainty and long-term earnings power is often where opportunity emerges.
Overall, I think this is a fantastic buying opportunity. Though, patience will almost certainly be required.
