Is the CSL Limited (ASX: CSL) share price a buy?
In the initial stages of the coronavirus share market sell off the CSL share price remained strong in Australian dollar terms as the US dollar strengthened.
But over the past week the CSL share price has actually fallen by 7% despite the share market strengthening.
CSL was seen as a bastion of safety with its healthcare services. It’s the number one in global plasma therapies and the number two for flu vaccines. Those are essential services.
That’s why the CSL share price didn’t drop anywhere near as much as shares like National Australia Bank Ltd (ASX: NAB) or Qantas Airways Limited (ASX: QAN).
But we saw the Australian dollar weaken to as low as $0.57 compared to the US dollar during March 2020. The Aussie dollar has since strengthened to $0.68. That makes a big difference when looking at CSL’s earnings which are reported (and a large portion is generated) in US dollars.
CSL recently announced new debt facilities to strengthen its debt profile.
Is it a good time to buy CSL at this share price?
The healthcare giant is aiming for a net profit in FY20 of between US$2.11 billion to US$2.17 billion. This would be another solid result after years of impressive growth already. The company continues to invest heavily into research and development to ensure that it continues to produce the new needed products for people. New treatments could make a big difference to the world. It’s one of many businesses looking to find a coronavirus treatment.
I think it makes a lot of sense to invest in CSL when the Australian dollar is so strong. It’s certainly not cheap, so I wouldn’t want to buy a lot. But I’d be willing to be some today.
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More reading
- Why I would buy these ASX 200 blue chip shares in June
- In your 50s? Here are the 2 best ASX 200 shares to buy now
- Why Austal, CSL, Fortescue, & Star shares are charging higher today
- 5 ASX 200 winners and 3 losers from last week
- ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000
Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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