Is the CSL Limited (ASX: CSL) share price a buy after giving an update to the ASX this week?
What did CSL say?
The healthcare giant said that its primary objective is to ensure the safety and wellbeing of its staff, donors and continuity of supply of medicines to patients.
CSL’s expertise, technologies, equipment and materials are being provided to support the response to COVID-19. It has implemented business continuity plans at all of its sites.
However, whilst collection centres have been designated as essential critical infrastructure, plasma collections are expected to be impacted. Thankfully CSL said that there is potential to accelerate plasma collections after this crisis is over.
CSL reminded investors that its products are life saving or life extending – which are usually non-discretionary in the nature of demand. There is currently strong demand for influenza vaccines.
The company hasn’t run out of stock, with no interruption to the supply chain.
There are expectations of “modest” delays with capital projects and clinical trials, but CSL can then accelerate activity after the crisis to ensure no material change to the original plan.
CSL said it has a strong capital position with around US$1.1 billion of available liquidity and profit guidance was reaffirmed at US$2.11 billion to $2.17 billion at constant currency.
How did the CSL share price react?
Yesterday the CSL share price rose by over 5% to $329. The share price is almost back to the pre-crash price.
With Australia’s (and the US’) lower interest rate I think CSL should be priced a little higher than it would have been before, all things being equal. CSL is a good business, but it’s not cheap at all and it’s already very large. I think there are better opportunities in the mid-cap (and small-cap) space which have been hit harder yet have longer growth runways.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.