CSL Ltd (ASX: CSL) shares can't escape the wider market sell-down today.
Shares in the S&P/ASX 200 Index (ASX: XJO) biotech stock are down 0.22% in afternoon trade on Wednesday, changing hands for $264.12 apiece.
For some context, the ASX 200 is down 0.84% at this same time.
But looking to the year ahead, Ord Minnett's Tony Paterno has an optimistic outlook on CSL stock (courtesy of The Bull).
Time to buy CSL shares?
"This biotechnology giant recently posted mixed results across its key business units in the first half of fiscal year 2025," said Paterno, who has a buy recommendation on CSL shares.
But a crucial growth metric could be set to boost the company's profitability.
According to Paterno:
Management flagged that gross margins for its plasma business Behring are expected to reach about 57% by fiscal year 2027/2028. We believe this is crucial considering Behring currently accounts for about 67% of group revenue and 63% of earnings.
Commenting on the ongoing effort to boost gross margins after CSL released its H1 FY 2025 results last month, CEO Paul McKenzie said, "In CSL Behring we will continue to focus on improving our gross margins, which will be aided by the expected completion of the RIKA roll-out across CSL Plasma by the end of the financial year."
Rounding off why he's bullish on the ASX 200 biotech stock, Paterno noted, "Recent price/earnings valuations imply an attractive entry level, particularly as CSL has traditionally traded at a steep premium to the S&P/ASX200."
CSL stock also trades on an unfranked dividend yield (part trailing, part pending) of 1.6%.
But not everyone is convinced that now is the best time to pull the trigger on CSL shares.
A more cautious outlook
MPC Markets' Mark Gardner, for example, has a hold recommendation on CSL shares (courtesy of The Bull).
"The biotechnology giant generated revenue of $US8.470 billion in the first half of fiscal year 2025, up 5% at constant currency on the prior corresponding period," Gardner said.
Despite his hold recommendation, Gardner noted the solid growth CSL achieved over the half year in its core financial metrics.
He said:
Net profit after tax of $US2.043 billion at constant currency was up 7%. Key product segments demonstrated strong growth, with immunoglobulin product sales up 15%. Albumin sales increased 9% and haemophilia product sales increased 11%.
The company's gross margin improved by 170 basis points, reflecting operational efficiency.
What's the growth outlook for CSL shares?
For the full year FY 2025, management is forecasting year on year revenue growth of 5% to 7% on a constant currency basis.
CSL expects fiscal year 2025 net profit after tax and amortisation (NPATA) to be in the range of US$3.2 billion to US$3.3 billion on a constant currency basis. That equates to profit growth of approximately 10% to 13%.
CSL shares are down 7% over the past year, not including dividends.
