Company Reports

CSL's fiscal 2026 underlying earnings fell 2%, in line with the guidance reset in May, and USD 7.1 billion of impairments drove a statutory loss. Fiscal 2027 guidance is for flat revenue and underlying profit growth of about 5%. Shares surged 17% on Aug 18.

CSL is one of three Tier 1 plasma therapy companies that benefit from an oligopoly in a highly consolidated market. All the players are vertically integrated, as plasma sourcing is a key constraint in production. The plasma sourcing market is currently largely balanced with demand. CSL is well positioned, having rationalized its plasma collection centers.

We transfer coverage of CSL, a global leader in plasma therapies, influenza vaccinations, and iron and kidney products. Shares have plummeted over 60% in the last two years on several earnings downgrades, significant impairments, and fiercer competition.

CSL is one of three Tier 1 plasma therapy companies that benefit from an oligopoly in a highly consolidated market. All the players are vertically integrated, as plasma sourcing is a key constraint in production. The plasma sourcing market is currently largely balanced with demand. CSL is well positioned, having rationalized its plasma collection centers.

CSL is one of three Tier 1 plasma therapy companies that benefit from an oligopoly in a highly consolidated market. All the players are vertically integrated as plasma sourcing is a key constraint in production. The plasma sourcing market is currently largely balanced with demand. CSL is well positioned, having rationalized its plasma collection centers.

CSL expects full-year underlying earnings to fall 4% on last year versus prior guidance of mid-single-digit growth, largely due to customer inventory of higher-margin products normalizing. The firm also plans to book a significant USD 5 billion in additional noncash impairments. Shares fell 16%.

CSL is one of three Tier 1 plasma therapy companies that benefit from an oligopoly in a highly consolidated market. All the players are vertically integrated as plasma sourcing is a key constraint in production. The plasma sourcing market is currently largely balanced with demand. CSL is well positioned, having rationalized its plasma collection centers.

We have reflected on CSL's soft interim plasma result and temper our view. Immunoglobulin, or lg, sales, which made 57% of plasma sales, fell 6% year on year in constant currency. The former CEO hadn't executed as hoped, with plasma margins up just 10 basis points to 51%.

CSL is one of three Tier 1 plasma therapy companies that benefit from an oligopoly in a highly consolidated market. All the players are vertically integrated as plasma sourcing is a key constraint in production. The plasma sourcing market is currently largely balanced with demand. CSL is well positioned, having rationalized its plasma collection centers.

CSL's interim 2026 underlying EBIT fell 3% on 5% lower plasma sales. Full-year guidance of mid-single-digit earnings growth was reaffirmed, and the Seqirus and Vifor divisions fared relatively well. But the soft plasma result and retirement of CEO Paul McKenzie sent shares down 11%.

CSL shares are down roughly 40% since acquiring Vifor in August 2022, an iron deficiency and kidney disease business and the largest acquisition in its history. However, several other factors have contributed too, most recently in soft earnings guidance driven by a troubled vaccines business.

CSL is one of three Tier 1 plasma therapy companies that benefit from an oligopoly in a highly consolidated market. All the players are vertically integrated as plasma sourcing is a key constraint in production. The plasma sourcing market is currently in short supply, however, CSL is well positioned having invested significantly in plasma collection centers, owning roughly 30% of collection centers globally.

CSL cut its fiscal 2026 guidance for revenue and net profit after tax before amortization growth to 3% and 6% at the midpoint, respectively, from 5% and 9%. This was driven by declines in US immunization, with the firm also delaying its plan to demerge the Seqirus vaccines arm. Shares fell 15%.

CSL is one of three Tier 1 plasma therapy companies that benefit from an oligopoly in a highly consolidated market. All the players are vertically integrated as plasma sourcing is a key constraint in production. The plasma sourcing market is currently in short supply, however, CSL is well positioned having invested significantly in plasma collection centers, owning roughly 30% of collection centers globally.

CSL is one of three Tier 1 plasma therapy companies that benefit from an oligopoly in a highly consolidated market. All the players are vertically integrated as plasma sourcing is a key constraint in production. The plasma sourcing market is currently in short supply, however, CSL is well positioned having invested significantly in plasma collection centers, owning roughly 30% of collection centers globally.

CSL's fiscal 2025 net profit after tax before amortization rose a solid 14%. But fiscal 2026 guidance implies 9% NPATA growth at the midpoint and assumes soft revenue growth of just 5%. Shares fell 17% with the market questioning if CSL can cut staff costs without slowing revenue growth further.

While pharmaceuticals are still exempt from US tariffs, President Donald Trump has threatened a potential 200% tariff on these imports, perhaps from 2027. Reciprocal tariffs announced prior have also been delayed by a month to Aug. 1, 2025. Australian healthcare stocks barely reacted.

Despite no material announcements, shares in CSL have declined another 12% since reporting interim results in February 2025.

CSL is one of three Tier 1 plasma therapy companies that benefit from an oligopoly in a highly consolidated market. All the players are vertically integrated as plasma sourcing is a key constraint in production. The plasma sourcing market is currently in short supply, however, CSL is well positioned having invested significantly in plasma collection centers, owning roughly 30% of collection centers globally.

Narrow-moat CSL reiterated fiscal 2025 guidance for constant-currency group net profit after tax before amortization, or NPATA, of USD 3.2 billion to USD 3.3 billion, implying 10%-13% growth on fiscal 2024 and a weaker second half consistent with typical seasonality aligned with the Northern hemisphere winter. The guidance factors in continued gross margin recovery in CSL Behring and constant-currency group revenue growth of 5% to 7%, largely driven by immunoglobulins, or Ig. We keep our fiscal 2025 estimates broadly unchanged. But from fiscal 2026 onward, we decrease our group earnings estimates by 2% on average due to challenging conditions in CSL’s flu vaccine business, Seqirus. However, the negative valuation impact was more than offset by a stronger US dollar and the time value of money, and we increase our fair value estimate by 5% to AUD 325 per share. CSL Seqirus is the group’s least material division and contributes 11% on average to our group gross profit forecasts, relative to CSL Vifor contributing 14% and CSL Behring contributing 74%.