It has been a strange 12 months for Australian investors with a number of normally reliable ASX 200 blue chip shares crashing deep into the red.
For example, the two blue-chip shares in this article have fallen by over 40% since this time last year, putting a big dent in investor portfolios and superannuation funds.
While that is disappointing, one leading broker appears to believe it could have created a compelling buying opportunity for investors.
Here are two beaten-down ASX 200 blue-chip shares that could be dirt cheap according to Morgans.
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CSL Ltd (ASX: CSL)
While not impressed with this biotech's half-year results, Morgans thinks investors should be snapping up CSL shares this month. It has put a buy rating and $241.34 price target on them, which implies potential upside of almost 70% for investors.
Commenting on its buy recommendation, Morgans said:
1HFY26 result was softer and less clean than expected, with adjusted NPATA declining 7% and revenue modestly below forecasts. The result was further complicated by US$1.1bn in impairment charges, largely relating to Vifor and Seqirus, weighing on statutory earnings and sentiment. Importantly, FY26 guidance was maintained, despite Behring weakness and heightened scrutiny following the announced CEO transition, suggesting a 2H recovery, pointing to an execution reset, not structural impost, in our view.
The outlook looks supported through a combination of cost-outs, marketing initiatives, new product launches and diminishing headwinds, reinforced by the Board's urgency around operational delivery. We adjust FY26-28 forecasts modestly, with our PT decreasing to A$241.34. BUY.
James Hardie Industries plc (ASX: JHX)
Another ASX 200 blue chip share that Morgans is bullish on is building materials company James Hardie. It has put a buy rating and $45.75 price target on its shares. Based on its current share price of $29.46, this suggests that upside of 55% is possible for investors.
Morgans was pleased with James Hardie's performance in the third quarter and thinks now could be the time to buy. It explains:
JHX delivered a clean Q3 beat with sequential margin improvement, disciplined execution on AZEK integration, and early evidence that volumes in core Siding & Trim (S&T) are stabilising at low levels. While NPAT remains temporarily weighed by amortisation and higher interest, the underlying margin trajectory and synergy capture both point to improving earnings quality into FY27.
With US housing likely near the trough, we see medium-term upside as organic growth returns, synergies compound, and leverage falls toward <2.0x by 3Q28. We retain our BUY rating and lift our valuation to A$45.75/sh.
