Here's the earnings forecast out to 2029 for CSL shares

This biotech giant could see significant profit growth in the coming years.

| More on:
Young investor watching share chart in anticipation

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One of the best things to see from a good company is rising net profit. That's usually what sends share prices higher over time and also helps fund larger dividend payments. Could CSL Ltd (ASX: CSL) shares see significant profit growth in the medium term?

As we can see in the chart above, CSL shares have traded largely sideways over the past five years. In my mind, the rising earnings of the last few years have been catching up with the company's elevated price/earnings (P/E) ratio during that period, so the share price hasn't been able to push higher.

Excitingly, the company is expected to grow profit in each of the coming financial years. Let's look at what's expected of the ASX healthcare share with the help of UBS' profit estimates.

Predictions for FY25

The 2025 financial year is the current financial year, and we're already halfway through it!

UBS believes the CSL shares story is "heavily focused on gross profit margin improvement" at Behring. According to CSL, that division develops and delivers "high-quality medicines that treat people with rare and serious diseases." This includes a range of recombinant and plasma-derived products for treating bleeding disorders, immune deficiencies, and other diseases.

The guided time window for the gross profit margin is between FY26 to FY28 to get back to pre-COVID levels of approximately 57%. The biggest improvement is expected in FY26, with a forecast rise of 200 basis points (2.00%), according to the broker.

UBS also noted that flat flu vaccine sales were expected in FY25, with other major manufacturers pointing to slow sales. US uptake has not returned to pre-COVID levels, and the weather is "warmer than usual in many parts of North America". UBS noted data that suggested the US retail channel saw 4% overall "market shrinkage" with CSL "looking worse".

The broker noted that CSL has already flagged lower orders from major retailers, so UBS believes the headwinds should not surprise investors.

However, UBS remains "optimistic about future recovery" although it's keeping in mind the "possibility of a less vaccine-friendly US administration."

Looking at the broker's forecast for FY25, UBS suggests CSL could generate US$16 billion of revenue and make a net profit of US$3.3 billion.

Expectations for FY26

Bearing in mind the comments above about expected profit margin improvement in the 2026 financial year, this year's net profit could significantly improve, which will help support CSL shares.

UBS forecasts CSL could generate US$17.1 billion of revenue in the 2026 financial year and make US$3.8 billion of net profit (up 16% year over year).

How about FY27?

According to UBS, the 2027 financial year could be another solid period with growth expected for the ASX healthcare share.

Revenue could rise to US$18.6 billion in FY27, helping net profit jump 18.5% to US$4.55 billion.

And FY28?

UBS is predicting ongoing double-digit profit growth for the biotech company to the end of the decade.

If the broker's projections come true, then in FY28, the business could make US$20 billion of revenue and US$5.2 billion of net profit, representing a 14.2% year-over-year increase.

And finally, FY29

The last year of this series of projections is the 2029 financial year. It could cap off an excellent period of growth for the company if UBS is right. In FY29, CSL is projected to generate US$21.6 billion of revenue and make US$5.8 billion of net profit.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Healthcare Shares

A businesswoman exhales a deep sigh after receiving bad news, and gets on with it.
Earnings Results

Cochlear share price sinks 10% on half-year result disappointment

Let's see why investors are hitting the sell button this morning.

Read more »

Woman flexes muscles after donating blood.
Healthcare Shares

The CSL share price hit a 52-week low this week. Is it time to buy?

Is this beaten-up biotech a healthy opportunity?

Read more »

A group of people in a corporate setting do a collective high five.
Healthcare Shares

Sigma share price up 9% on first day of trading post-merger with Chemist Warehouse

It's a post-merger party for Sigma Healthcare shareholders today.

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

Up 135% in a year, why this ASX 200 healthcare stock is 'on track to become a truly great Australian success'

A leading fund manager expects more strong performance from this surging ASX 200 healthcare stock.

Read more »

Stethoscope with a piggy bank in the middle.
Healthcare Shares

With revenue up 9%, why does the NIB share price keep falling?

Will the ailing share price make a full recovery?

Read more »

Six smiling health workers pose for a selfie.
Healthcare Shares

Guess how much $5,000 invested in Sigma shares in December 2023 is worth now!

Sigma shares have soared over the past year alongside the merger with Chemist Warehouse.

Read more »

Woman with headphones on relaxing and looking at her phone happily.
Healthcare Shares

Everything you need to know about the latest CSL dividend

CSL's latest dividend should be turning investors' heads...

Read more »

thoughtful investor sitting at computer
Healthcare Shares

What are brokers saying about CSL shares after the selloff?

The biotech giant's shares hit a 52-week low yesterday. Is this a buying opportunity?

Read more »