Goldman Sachs gives its verdict on the CSL share price


The CSL Limited (ASX: CSL) share price has been on a decent run over the last couple of months.

Since the middle of June, the biotherapeutics company’s shares have risen a sizeable 14%.

This compares to a gain of approximately 6% for the benchmark ASX 200 index.

Why is the CSL share price on a roll?

Investors have been bidding the CSL share price higher due to the release of very positive industry data.

That data shows that plasma collection levels are now back to pre-COVID levels in the United States at long last.

This is a big positive for CSL as plasma is a key ingredient in many of its most lucrative therapies. When it was in short supply, the company was paying more than normal for donations, which was putting pressure on its margins. With supply now back to normal and collection prices reducing, CSL should soon start to see its margins improve again.

All in all, the general consensus is that CSL is now over the worst of its issues, and it is onwards and upwards from here. But will it be onwards and upwards for the CSL share price?

Where are its shares heading?

According to a note out of Goldman Sachs, its analysts believe CSL’s shares may be close to peaking for the time being.

This morning the broker has resumed coverage on the company with a neutral rating and $307.00 price target. This implies potential upside of just 5% from the current CSL share price of $292.35.

Goldman believes that the company’s shares are about fair value now based on historic earnings multiples. It explained:

Valuation of 34x NTM P/E has now recovered to the 5yr avg, and is back above the 10yr (29x). We believe risk-reward is once again well-balanced, and reinstate our rating at Neutral, with a 12-month TP of A$307.

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