Top broker Ord Minnett has dropped its expectations for CSL Limited (ASX: CSL) shares by 9.5% today, reportedly citing concerns about its plasma and flu divisions.
The biotechnology company's stock has tumbled 12% since the start of 2022.
At the time of writing, the CSL share price is $257.66, 1.2% higher than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 1.14%.
Let's take a closer look at what's undermined Ord Minnett's confidence in CSL's stock.
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Broker lowers expectations of CSL stock
The top broker has dropped its price target for CSL shares from $315 to $285, maintained a "cautious view" of the company's stock, and kept its 'hold' rating, according to reporting by The Australian.
The lowered expectations are reportedly a reflection of an anticipated gross margin drop from the company's plasma division.
The broker is also said to be expecting CSL's Seqirus – creator of the company's flu vaccines – to contribute less.
In financial year 2021, Seqirus' revenue increased 30% on a constant currency basis, driven by a record number of flu jabs administered.
The Australian quoted Ord Minnett analysts as telling clients:
We have reduced our [financial year 2023 (FY23)] [earnings per share (EPS)] forecast by 4%.
We have adjusted our Vifor forecasts to reflect the expected treatment of minorities and amortisation.
After these revisions, we continue to forecast a strong uplift in earnings in FY23 as plasma volumes recover and the Vifor business starts to contribute.
In December, CSL announced its bid to acquire Swiss company Vifor Pharma for US$11.7 billion ($16.4 billion at today's exchange rate).
However, not all brokers' expectations of CSL are falling.
As The Motley Fool Australia's James Mickleboro recently reported, Macquarie analysts have slapped CSL shares with a $325 price target.
CSL share price snapshot
The CSL share price has limped into 2022, down almost 12% year to date. However, its medium-term performance isn't much better.
It has fallen 7% since this time last year. Though long term investors rejoice — it's has gained 124% since February 2017.
