The CSL Ltd (ASX: CSL) share price is trading at a six-year low, closing at $215.16 on Tuesday, down 0.57% for the day.
The market's largest ASX 200 healthcare share has lost a fifth of its market cap since the company released its FY25 report last Tuesday.
Let's recap why.
CSL share price falls to a 6-year low
CSL surprised the market by announcing the demerger of Seqirus and a multi-year share buyback targeting US$500 million in FY26.
Seqirus is CSL's vaccines division, and the company intends to list it separately on the ASX in FY26.
CSL also confirmed a restructure ahead, stating that growth had led to operational complexity that now requires streamlining.
This 'strategic transformation' will involve streamlining research and development (R&D), cutting staff numbers by up to 15%, and closing 22 underperforming plasma centres in FY26.
CSL estimates one-off pre-tax restructuring costs of US$700 to US$770 million in FY26, with another $100 million to be spent in FY27.
The company is aiming for US$500 million to US$550 million in annualised pre-tax savings by the end of FY28.
It says the majority of these savings will be achieved by the end of FY27.
For FY25, the ASX 200 biotech giant reported a 5% revenue bump to US$15.6 billion and a 17% profit increase to US$3 billion.
CSL is an ASX 200 blue-chip share that has long been considered a safe and reliable investment for long-term capital growth.
Did the COVID-19 interruption mess that up?
Over the past five years, the CSL share price has fallen by 26% while the S&P/ASX 200 Index (ASX: XJO) has lifted 47%.
Are investors' perceptions of this ASX 200 stalwart changing, particularly as it embarks on this major restructure?
Broker says FY25 report 'a bitter pill for investors to swallow'
Ord Minnett described CSL's FY25 report as "a bitter pill for investors to swallow".
The broker noted revenue weakness in the Behring blood plasma business and ramped-up competition in the specialty products segment.
It described CSL's decision to demerge Seqirus as "confounding" and the company's three-year cost savings ambitions as "optimistic".
The broker said:
These factors, combined with the company walking away from its previous timeline of 3–5 years for a recovery in margins in the dominant Behring plasma products business (circa 70% of group revenue and operating earnings), have introduced a hitherto lacking degree of uncertainty and complexity into the earnings outlook and investment case for CSL.
Ord Minnett has cut its earnings per share (EPS) forecasts for FY26-FY28 by 1%-8%, and by 12% further out.
The broker also downgraded its recommendation on CSL from buy to hold with a share price target of $258.
That price target represents a 17% reduction from the previous target of $310.
What do other experts think?
Ord Minnett's new price target is the lowest reported by the Motley Fool team since CSL released its FY25 report.
Several other brokers value CSL shares in the $290 range.
One example is Morgans, which has a buy rating on CSL with a trimmed share price target of $293.83.
The broker commented:
While investors have taken a glass half full approach, we believe the restructuring augments, not masks the underlying business, with streamlining operations and cost savings supporting double-digit earnings growth over the medium term.
E&P said it was disappointed with CSL's report but maintained a positive rating with a trimmed share price target of $294.21.
The broker commented:
The key question is whether Behring's weak 2H25 signals structural pressure or a temporary setback.
Management insists it's the latter, although medium-term Ig growth expectations have effectively eased to mid-to-high single digits (still respectable).
On balance, we see the sell-off as a potential buying opportunity.
Macquarie maintained its outperform rating on CSL shares with a $295.90 price target after reviewing the healthcare giant's report.
The broker said:
Despite downgrades to earnings, we view [Tuesday's] price movement as an overreaction.
Incorporating more conservative FY26 forecasts compared to guidance, we see the current valuation as undemanding (trading at P/E ~20x with ~10% EPS growth).
