Why CSL shares now look ‘massively oversold’

CSL Ltd (ASX: CSL) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) biotech stock closed yesterday trading for $182.30. In early afternoon trade on Thursday, shares are changing hands for $183.49 apiece, up 0.7%.

For some context, the ASX 200 is just about flat at this same time.

Unfortunately for longer-term stockholders, CSL shares remain down 35.2% over the past 12 months. Losses that will have only been modestly eased by CSL’s two dividend payouts over the year. At the current share price, the ASX 200 stock trades on an unfranked 2.5% trailing dividend yield.

As you may be aware, most of the selling has occurred since market close on 18 August. On 19 August, shares closed down a sharp 16.9% following the release of CSL’s full-year FY 2025 results.

Atop revealing sluggish influenza vaccine uptakes in the United States, one of the biggest concerns investors appeared to have was CSL’s announcement that it intended to spin off one of its Seqirus segment – one of the world’s largest influenza vaccine businesses – into a separate ASX-listed company.

Management has since temporarily mothballed the Seqirus spin-off plans as they wait for conditions in the US influenza vaccine market to improve.

With all that said, having reviewed the recent carnage, Red Leaf Securities’ John Athanasiou believes investors have way oversold CSL shares (courtesy of The Bull).

A rare opportunity to buy CSL shares

“This biotechnology company is massively oversold, in our view,” said Athanasiou. “CSL offers a rare chance to buy a global plasma therapy powerhouse at a discount.”

Digging into the strengths CSL shares offer, Athanasiou said:

Its $1.5 billion US investment strengthens the core Behring business and secures long term immunoglobulin supply. Its planned transformational restructuring is expected to unlock between $500 million and $550 million over three years, turbocharging cash flow.

Looking ahead, Athanasiou concluded, “Share buy-backs, a rising dividend and secular demand tailwinds for chronic therapies point to significant upside if management can successfully execute its strategy.”

Is the ASX 200 stock already on the comeback trail?

CSL shares hit a five-year-plus closing low of $170.77 on 29 October. The stock has now gained 7.5% from that low.

The biotech company looks to have helped boost investor sentiment following its Capital Markets Day on 5 November.

Management used the opportunity to highlight that CSL Seqirus had a 42% share of the global influenza vaccine market in 2025.

They also noted that, should the world see another pandemic outbreak, CSL would be able to pump out 500 million pandemic doses within four months.

In that scenario, CSL said it would expect to earn more than $3.5 billion in pandemic revenue.

The post Why CSL shares now look ‘massively oversold’ appeared first on The Motley Fool Australia.

More reading

• 4 ASX shares I’d buy today with $10,000
• 3 high-quality ASX 200 shares now trading at multi-year discounts
• Here’s the dividend forecast out to 2030 for CSL shares
• Is the worst finally over for CSL shares?
• What happened with CSL shares in November?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.