The CSL Limited (ASX: CSL) share price is up 1.76% to $267.48 in afternoon trading on Thursday.
The ASX 200 biotech blue-chip has done very little to excite ASX shares investors in recent years.
In 2023 so far, the CSL share price has dropped 5%. Over the past three years, the stock has been in the doldrums, down 3.5% overall.
At times, the CSL share price has risen above the $300 threshold in 2022 and 2023 but has failed to stay there.
Most recently, CSL shares came under pressure in June when the company downgraded its FY23 guidance due to foreign currency headwinds.
Still, CSL estimated a 13% to 18% annual increase in net profits after tax and amortisation (NPATA) for FY24 at approximately US$2.9 billion to US$3 billion.
This was below market expectations and the CSL share price fell to a new 52-week trough of $255.87 in the middle of this month.
Painful, right?
Well, after all this pain, CSL may well be the no-brainer buy of FY24 and it’s staring us right in the face.
Why do I say that?
Because 12 brokers and fund managers are backing the stock for a “break out year” in FY24.
That’s an awful lot of support among a group of ASX experts that rarely think in a uniform way.
CSL share price in for a ‘break out year’ in FY24
This is the opinion of top broker Morgans. Let’s canvas the views of our 12 experts.
Where possible, we have included these brokers’ and fund managers’ 12-month share price targets.
This is their best guestimate as to where they think the CSL share price might be this time next year.
Citi
The most bullish of the bunch in terms of share price targets is Citi and UBS.
Citi has a buy rating on CSL and a 12-month share price target of $340. This implies a 27% potential upside on the stock.
UBS
As my Fool colleague James reports, UBS retains its buy rating on CSL with a $340 share price target this month.
Morgans
This broker says CSL shares are “poised to break out this year“. Morgans has an add rating and a $323 share price target.
Morgans says:
A key portfolio holding and key sector pick, we believe CSL is poised to break-out this year, a COVID exit trade, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares offering good value trading around its long-term forward multiple of ~30x.
Macquarie
Macquarie has an outperform rating on CSL shares with a $326 price target.
Morgan Stanley
Morgan Stanley analysts have retained their overweight rating and $325 price target on CSL shares.
The broker points out that US healthcare stocks have outperformed the market by an average of 13% during the past four recessions.
Jefferies
Earlier in July, Jefferies raised its rating on CSL to buy with a share price target of $318.
CLSA
Broker CLSA recently increased its rating on CSL to buy with a $313 share price target.
Wilsons Advisory
As my Fool colleague Bernd covered this week, equity strategist Rob Crookston has laid out the long-term investment case for buying CSL shares.
He estimates a 17% compound annual growth rate (CAGR) over the next five years with “earnings upside potential from expected product launches over the coming years”.
Crookston reckons CSL’s current 12-month forward price-to-earnings (P/E) multiple of about 28 times makes it “very attractive on a long-term basis.”
He expects CSL’s operational costs to fall and a “robust pipeline of new products” to drive earnings growth.
Crookston says CSL’s commitment to research and development “ensures a sustainable competitive advantage”.
CSL has previously committed to spending 10% to 11% of its revenue on research and development every year.
According to Crookston:
This reinvestment allows CSL to stay at the forefront of medical advancements and maintain the aforementioned strong pipeline of innovative products. A key reason the company has been able to compound earnings over the long-term.
Fidelity
Fidelity’s Zara Lyons recently explained the 5 reasons to buy CSL shares right now.
Lyons likes CSL for its “diversified portfolio of assets with strong market positions and solid underlying demand”.
She also cites “attractive assets in its pipeline”, including CSL112, which improves cholesterol efflux capacity.
Elston
In a recent article, Elston portfolio manager Leon de Wet said: “the magnitude of monetary tightening by Central Banks globally has been staggering” and the prospect of recession in many countries remains.
This has prompted the team to increase the overall weighting in its ASX shares portfolio to non-cyclical businesses “that should perform regardless of economic conditions”, with CSL shares among them.
Firetrail
Firetrail maintains its long-term conviction on CSL shares despite recent price weakness.
The analysts said:
FY2023 guidance was moved to the top end of the previous range. However, expected profit growth of 13% to 18% in FY2024 fell short of market expectations.
We are seeing very strong improvements in the cost of inputs for CSL’s plasma business.
However, we expect this to take 9 to 12 months to flow through to improved margins in the P&L.
QVG Capital
QVG is unfazed by CSL’s recent earnings guidance for FY24, which was 14% below forecasts.
In a memo, QVG said:
Naturally there is a level of conservatism in this guidance given we’re a year out from closing FY24 but the key reason for this adjustment is a slower recovery of margin.
We like that CSL is significantly under-earning relative to its past margins but will have to wait multiple reporting periods to see them demonstrate this earnings power.
To top it all off, my Fool colleague Tony reported last week that 15 out of 18 analysts on CMC Markets rate the CSL share price a buy, and 11 of them say it’s a strong buy.
An amazing history
While past performance is no guarantee of future performance, it is hard to ignore CSL’s remarkable history on the ASX.
Since listing in 1994, the blue-chip ASX 200 biotech has gone up by 5,579%, as shown below.
Meantime the ASX 200 has gone up 59%.
So, the CSL share price has appreciated at a rate of 94:1 against the benchmark index.
