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CSL Limited (ASX:CSL) shares are currently experiencing a challenging trading session, with a 2% drop in the biotherapeutics company's stock, bringing it to $234.43 in afternoon trade. This decline means ASX CSL shares have fallen by approximately 22% over the past six months. However, the team at Citi believes that the current share price presents an attractive opportunity for investors.
According to a note from this week, Citi has maintained its buy rating and $325.00 price target for CSL shares, indicating a potential upside of approximately 39% for investors over the next 12 months. Additionally, the broker anticipates a 1.8% dividend yield in FY 2024, which would further boost the total potential return to over 40%.
Citi's Positive Outlook
Citi's optimism about CSL's potential stems from its recent capital markets and R&D day events. The broker believes that the company is on track to meet market expectations in the medium term. As a result, it forecasts a mid-teen earnings per share compound annual growth rate (CAGR) through FY 2028.
CSL is targeting Behring GM levels that are consistent with pre-pandemic figures (approximately 57-58%) within the next 3-5 years. Additionally, CSL anticipates an immunoglobulin (Ig) market volume growth of 6-8% CAGR from FY 2023 to FY 2028, with plans to grow even further beyond that, while also implementing low-single-digit/CPI price increases despite competition related to the neonatal Fc receptor (FcRn).
Citi also notes that CSL's management doesn't expect any significant impact from Ozempic on its business, which suggests that the recent selloff of CSL shares may have been an overreaction.
As it stands, CSL is trading at a price-to-earnings (PE) ratio for FY 2025 of approximately 23x, which represents a 5x discount compared to historical averages.
In summary, Citi maintains its "Buy" rating and a $325.00 price target for CSL shares, signaling the potential for substantial gains in the coming year.
