Out of the five largest companies on the ASX by market capitalisation, CSL Limited (ASX: CSL) shares have performed the worst throughout 2022.
The market went cold on the biotech giant in January as the world was gripped by uncertainty. A month earlier, the company announced it intended to hand over A$17.5 billion to acquire Vifor Pharma in what would be CSL's largest deal in its history.
Fast forward to today, the CSL share price is 2.3% worse off than where it finished up last year. Could the depressed share price be a buying opportunity before 2023? Or, could it be better to avoid injecting this company into your portfolio?
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What do the experts think of CSL shares?
Despite the Australian drug developer's rather lofty price-to-earnings (P/E) ratio, a number of brokers and fund managers still like the look of CSL. At the current market rate, the plasmas-derived product maker trades at 40 times earnings.
Nonetheless, the team at Citi holds a buy rating on the company's shares with a $340 price target. This would suggest an additional 17% upside from here. Part of the optimistic perspective relies on CSL's drug development pipeline — something that the Vifor acquisition is believed to further enhance.
Likewise, analysts at Bell Potter hold a positive outlook on CSL amid its latest expansion. The broker also foresees strong and sustained growth in global plasma volumes, increasing at an 8% per annum clip.
Finally, Tribeca portfolio manager Jun Bei Liu shared a bullish perspective on CSL shares a few weeks ago. Liu revealed her expectations that the biotech company will " … grow double digits for the next three years."
Why it could be worth the premium
The success of a company can be influenced by the acumen or ineptitude of its competition. That's why I would take a look at some of CSL's rivals in the industry.
A couple of competitors that come to mind are Grifols (a Spanish plasma-based pharmaceutical player) and Baxter International Inc (NYSE: BAX) (an American healthcare giant focused on areas similar to Vifor).
Of these three companies, CSL has the thickest profit margins… it's not even a close comparison. This would suggest CSL is either a superiorly managed company, holds more valuable intellectual property, operates more efficiently, or a combination of these.
After all, the CSL share price probably wouldn't be up more than 100% over the past five years if it didn't have some edge.
