Top broker says buy CSL stock while trading on ‘cheapest multiple in a long time’

CSL Limited (ASX: CSL) has fallen slightly on the stock market in the last month, but could now be the time to pounce?

CSL shares have descended 0.84% since market close on 4 April and are fetching $290.81 a piece at last look. In today’s trade, CSL shares are 0.03% in the red. For perspective, the S&P/ASX 200 Index (ASX: XJO) is rising 0.01% today.

Let’s take a look at the outlook for CSL stock going forward.

What’s ahead?

CSL is a global biotechnology company that operates a huge plasma collection network along with developing a range of life-saving therapies and vaccines.

CSL is one of multiple “recession-proof” shares according to Airlie Funds Management head of Australian equities Matt Williams.

Williams noted CSL’s collection costs are falling and could go down even more. In quotes provided to The Australian, Williams said:

During Covid, the cost of collecting plasma went up significantly. Those costs are
now reducing and in fact, a recession should actually lead to lower collection costs
because they won‘t have to pay their blood donors as much.

CSL is absolutely in that basket of recession-proof stocks. It‘s trading on a similar
multiple to Woolworths but it’s actually the cheapest multiple I’ve seen it for a long
time.

CSL reported a net profit of US$1.62 billion in the first half of the 2023 financial year. The company noted plasma collections were at record levels.

Meanwhile, the team at Morgans has also recently placed an add rating on CSL shares with a $337.92 price target. This implies an upside of about 16% based on CSL’s current share price.

Analysts are optimistic plasma collections will lift and more people will take the flu vaccine. Morgans said:

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.

CSL share price snapshot

The CSL share price has lifted nearly 9% in the last year.

CSL has a market capitalisation of about $140 billion based on the current share price.

The post Top broker says buy CSL stock while trading on ‘cheapest multiple in a long time’ appeared first on The Motley Fool Australia.

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More reading

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• Morgans names the best ASX shares to buy in April
• This ASX share’s halved in 5 years, but I’m still sticking with it
• This ASX 200 giant is about to wake up from a 3-year slumber. Are you ready?
• Fundie loves these 2 ASX 200 shares that are ‘difficult to replicate’

Motley Fool contributor Monica O’Shea 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 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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