Forget CSL shares, I’d buy this booming biotech stock instead

CSL Ltd (ASX: CSL) shares are trading in the red again on Tuesday afternoon. At the time of writing they’re down 0.47% for the day at $178.46 a piece. That means the stock has now crashed 36.54% over the year-to-date.

The Australian biotech company’s shares suffered a brutal sell-off in mid-August. This followed its FY25 results and surprise restructure announcement which sparked an investor panic. As a result, the CSL share price lost around a fifth of its value within just one week. At the time, analysts said the investor reaction was overdone and unwarranted. 

Fast forward to just two and a half months later and the company’s share price dropped another 19.2% to a seven-year low in late-October. after it downgraded its FY26 revenue and profit growth guidance. 

Analyst consensus is that the sell-off of CSL shares is well overdone and that we’ll see a turnaround very soon. Analysts are bullish on the outlook of CSL shares too. They expect the share price could rocket as high as $273.82 over the next 12 months, which implies a 53.52% upside at the time of writing.

The 50+% anticipated increase is impressive, but I have my eye on another ASX biotech stock which I think is an even better buy for investors looking for growth.

Another ASX biotech stock set to boom

Mesoblast Ltd (ASX: MSB) is a clinical-stage biotechnology company which develops and commercialises allogeneic cellular medicines to treat complex diseases. The company has a specific Healthcare Common Procedure Coding System (HCPCS) J-Code for its recently approved Ryoncil stem cell therapy from the United States Centers for Medicare & Medicaid Services (CMS) and it plans to expand Ryoncil®’s approved use into adult SR-aGvHD patients. 

Mesoblast also has REVASCOR® for advanced chronic heart failure, and MPC-06-ID for chronic low back pain due to degenerative disc disease. These cell therapy candidates are towards the latter stages of their clinical trial pipelines. 

Not only is the company well-positioned for growth, it is also well-funded. Mesoblast said it will consider drawing additional capital from its convertible note facility as it continues to grow sales and broaden its cell therapy pipeline for other inflammatory conditions.

More good news is that Mesoblast’s cell therapy products will not be subject to the the US 100% tariff on pharmaceuticals. This is because they are manufactured in the US.

In my book, Mesoblast’s potential far outweighs that of CSL and its shares.

What does Mesoblast’s share price outlook look like?

Mesoblast shares are currently flat for the day at $2.72 a piece. Over the past month the shares have climbed 16.74% and over the past 6 months the shares have surged 46.24%. 

However, due to a sharp uptick in the share price in January this year, when the company posted its December quarterly report, the shares are currently trading 18.81% lower for the year-to-date. 

Analyst consensus is that there is a strong upside ahead for Mesoblast shares too.

TradingView data shows that all 6 analysts have a strong buy rating on the shares. The analysts are forecasting target prices as high as $5.25 per share. This implies a huge 92.56% potential upside at the time of writing.

Broker Bell Potter has a speculative buy recommendation on Mesoblast shares and a price target of $4. This indicates a potential upside of 47.1% at the time of writing. 

The post Forget CSL shares, I’d buy this booming biotech stock instead appeared first on The Motley Fool Australia.

More reading

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• Down 36% in 2025, should you buy CSL shares today?
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• Why did Macquarie just downgrade CSL shares?
• Here are the latest growth forecasts for the CSL share price

Motley Fool contributor Samantha Menzies 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.