CSL Ltd (ASX: CSL) shares finished last week on a disappointing note, falling 2% on Friday to close at $122.89.
The decline interrupted what had been an impressive recovery, with the ASX healthcare stock climbing 24% over the past month.
Even so, it's important to keep that rally in perspective. CSL shares remain down around 29% year to date and have lost roughly half their value over the past 12 months.
So, is this just a short-lived bounce, or could the recovery have further to run?
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Why are CSL shares recovering?
After one of the steepest sell-offs in the company's history, investors appear to have concluded that much of the bad news is already reflected in the share price.
CSL spent decades earning a reputation as one of the ASX's highest-quality businesses, consistently delivering earnings growth and rewarding long-term shareholders. Its leadership in plasma-derived therapies and strong global footprint made it a favourite among growth investors.
That narrative unravelled for CSL shares over the past year.
A series of earnings downgrades, leadership changes, and approximately US$5 billion in non-cash impairments related to the CSL Vifor acquisition severely damaged investor confidence and sent the shares tumbling.
However, bargain hunters have started returning as the valuation became increasingly difficult to ignore.
Competitive advantages remain
Importantly, the fundamentals of the business remain intact. CSL is still the world's second-largest plasma-derived therapies company, operating in a highly regulated industry with significant barriers to entry.
Its global plasma collection network, manufacturing expertise, and long-standing customer relationships continue to provide competitive advantages that are difficult for rivals to replicate.
While earnings growth has slowed, the business is still expanding.
Management expects FY26 revenue of around US$15.2 billion and underlying net profit after tax and amortisation (NPATA) of approximately US$3.1 billion on a constant currency basis.
The biggest challenge for CSL shares remains its US immunoglobulin business within CSL Behring, where competitive pressures continue to weigh on margins and growth expectations.
What do the brokers think?
Broker sentiment has become more balanced as CSL shares recover, although opinions differ on just how much upside remains.
Morgans is among the more optimistic brokers. It has a buy recommendation and a price target of $147.59, implying meaningful upside from current levels.
Macquarie Group Ltd (ASX: MQG) is more cautious. The broker has a neutral rating and a $114 price target, citing uncertainty surrounding CSL's core plasma and albumin businesses, as well as ongoing competitive pressures.
According to TradingView data, analyst sentiment remains mixed. Of the 18 analysts covering CSL, 10 have a hold recommendation, while the remaining eight rate the healthcare giant as either a buy or strong buy.
The consensus price target sits at $140.15, suggesting around 14% upside over the next 12 months.
Forecasts vary widely, however. The most bearish analyst expects CSL shares to fall to around $104.55, while the most bullish believes they could climb as high as $199.68.
