The CSL Ltd (ASX: CSL) share price has dropped close to 50% in the past year, but has it dropped so much that it has erased five years of gains?
If we look at the chart above, we can see that the ASX biotech share is down close to 60% in the past five years.
No other ASX 20 blue-chip share has suffered a decline as close to that, but for brave investors, the CSL share price is now much cheaper.
Image source: Getty Images
How many CSL shares could an investor buy five years ago?
Five years ago, during much better times for the ASX healthcare share, the CSL share price was trading at $284.19.
The company wasn't facing the multitude of issues it is today, including a more difficult operating environment in the US and a lower growth outlook in other parts of the world.
Back in June 2021, if an investor had invested $10,000 in CSL shares, they would have been able to buy 35 shares of the business. Back then, it was seen as a solid bet because of its long-term track record of growing earnings, investing in R&D in its core product portfolio and adding new treatments to its line-up.
However, earnings growth has slowed significantly, with the business not seeing the expected level of revenue growth, while costs have increased.
What could $10,000 buy now?
CSL is certainly a lot cheaper than it was five years ago – that's clear with the dramatic decline of the CSL share. It's not as though underlying profit has sunk, though – the big change is the price/earnings (P/E) ratio, being the multiple of earnings the company trades at.
If someone were to invest right now, they'd be able to acquire 86 CSL shares. In other words, an investor could buy 145% more CSL shares than they could five years ago. But it doesn't seem as much of a sure thing now as it did then. Of course, the valuation doesn't drop for no reason, but perhaps it has been oversold.
What could the CSL share price do next?
Experts generally have a positive view on the value offered by the ASX biotech share, with expectations that the business could climb from its current low level.
According to CMC Invest, the average price target from 11 analyst judgments on the business is $136.13. That implies a possible 17% rise over the next year if that average analyst call is right. Add in the dividends, and I think it's likely that it would beat the S&P/ASX 200 Index (ASX: XJO) if it happened.
But, there are other ASX shares that don't have the same level of uncertainty and could be better buys.
