CSL Ltd (ASX: CSL) shares had a day to forget on Tuesday.
The biotechnology giant's shares ended the session 17% lower at a 52-week low of $225.50.
This was driven by the release of its full year results for FY 2025, which while ahead of consensus estimates, included some surprising items of concern.
Has this created a buying opportunity for investors? Let's see what Bell Potter is saying about the blue chip.
Image source: Getty Images
What is the broker saying about CSL?
As mentioned above, Bell Potter notes that CSL's results were slightly ahead of expectations. However, this was not driven by the key CSL Behring business, as was expected.
In fact, this side of the business, which was expected to be the key driver of annual double-digit earnings per share growth over the remainder of the decade, barely grew during the second half of FY 2025.
Commenting on its performance, the broker said:
The FY25 group NPATA result was a small beat to consensus/BPe due to lower tax and opex offsetting the lower-than-expected 5% revenue growth. The key disappointment of the result was Behring – which has been the key driver of recent earnings growth – growing revenue at a modest 1% in 2H25 led by a 1% decline in flagship Ig sales. The result was boosted by one-off Seqirus avian flu contracts that will not recur in FY26 and Vifor beating expectations.
It also notes that there is now uncertainty in relation to the gross margin recovery of the CSL Behring business. As a result, the broker has pushed back its recovery assumptions. It adds:
Looking ahead, management is no longer committing to a Behring gross margin recovery timeframe (previously FY27-28) after admitting it is proceeding slower than planned. We have pushed our Behring GM recovery to FY29 (from FY28). Guidance for FY26 underlying earnings growth (7-10%) was also 2% below consensus and a bigger miss at the topline (4-5% growth guided at cFX).
Should you buy CSL shares after the selloff?
Bell Potter is now sitting on the fence with this one and appears to be waiting for improvements in its performance before recommending it to investors.
This morning, the broker has downgraded CSL shares to a hold rating (from buy) and cut its price target materially to $240.00 (from $305.00).
Bell Potter made the move due to its challenging near term outlook and uncertainty around its forecasts. It concludes:
While the market reaction to the FY25 result and strategic review was severe, we view the near-term outlook as challenging for CSL due to: underlying earnings growth below market expectations, underwhelming 2H25 Behring performance which has been the key pillar of growth for many years, delays to the assumed Behring margin recovery (to FY29), and uncertainty around FY27/28 forecasts of the demerged entity at this time. Hence, we have reduced our PT to $240 and lowered our recommendation to a Hold. We anticipate further clarity on the strategic review's financial implications at the November 5th Capital Markets Day.
