CSL traded very well during panic time but now it is going opposite direction to the market. Do you know why? Is there any particular reason? Is it a good buy below $290?
A: CSL has underperformed over the last month or so. Become a little “unloved”. I would put this down to:
- Global rotation out of healthcare stocks into other “deeper value” stocks (eg. banks);
- Index funds are now fully invested;
- Rising Australian dollar (CSL earns 90% revenue outside Australia)
- It may have had a bit of “virus treatment/vaccine” premium in it (which now looks unlikely)
Citi has upgraded CSL today from Neutral to Buy. Overall, the brokers remain positive with 2 buys, 4 neutrals and a target price of $314.82 – about 9.3% higher than yesterday’s closing price.