** Morningstar keeps A$165 fair value estimate despite headwinds faced by Australia's CSL Ltd CSL.AX

** Earlier this year, the biotechnology giant cut its annual profit citing regulatory headwinds and weak performance including other reasons

** The Investment research firm says shares are undervalued, says it is more optimistic on co's stock than the market on plasma demand and margins

** Morningstar sees co's immunoglobulin revenue to grow at a 10-year compound annual growth rate (CAGR) of 5% on higher volumes from population growth, rising diagnosis rates including others

** Also forecasts plasma gross margins to lift to 100 basis points till FY35, cites efficiency initiatives and rationalization of high-cost collection centers

** Says market for plasma products has become increasingly competitive and most cost savings will be offset by price competition

** Adds, separation of CSL Seqirus to help CSL to refocus on the core business

** YTD, CSL down 46.4%, as of firm's last close