Citi says CSL share price is great value amid large iron therapy opportunity

The CSL Limited (ASX: CSL) share price is underperforming on Tuesday.

In afternoon trade, the biotherapeutics giant’s shares are down almost 0.5% to $275.84.

Should you buy the dip in the CSL share price?

One leading broker that appears to believe investors should buy the dip in the CSL share price is Citi.

According to a note this morning, the broker has responded positively to the company’s update on its new CSL Vifor business.

So much so, its analysts have retained their buy rating with a lofty $340.00 price target.

Based on the current CSL share price, this implies potential upside of over 23% for investors over the next 12 months.

What is the broker saying about CSL?

While there were no surprises from the inaugural CSL Vifor investor day, Citi was happy with what it heard and believes it demonstrates why the company made the blockbuster acquisition.

The broker commented:

The inaugural Vifor investor day was largely as anticipated. CSL gave investors a better appreciation for the rationale behind the deal: Vifor has the most extensive suite of products available in a large underpenetrated market, with a limited number of competitors, and unique industry partnerships.

The medium-term revenue growth target of >10% will likely help support medium-term consensus, but questions will remain around the durability of the iron therapy franchise beyond the end of exclusivity period for Ferinject (~40% of Vifor revenue) in FY27.

Near term, the FY23 guidance was largely as anticipated although FX is a $200m headwind, and the accretion timeline seems to have been pushed out. Whilst these are negative, they were somewhat expected by the market. We are constructive on the iron and CKD markets longer-term. The main earnings driver for CSL remains Behring (>70% of group EBIT). Maintain Buy, $340 TP.

The post Citi says CSL share price is great value amid large iron therapy opportunity appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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 Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. 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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