Shares in CSL Ltd (ASX: CSL), already under pressure over the past year, took a further tumble after the company announced its first-half results in mid-February.
But the analyst team at UBS has run the ruler over the results and believes there's plenty of upside from current levels for the CSL share price.
Firstly, let's have a look at what CSL reported last month.
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Profits slide
The blood products company reported total revenue of US$8.3 billion, down 4% while net profit fell 7% to $1.9 billion.
The company's chief financial officer, Ken Lim, said it was an unsatisfactory result.
We are clearly not satisfied with our performance and have implemented a number of initiatives to drive stronger growth going forward. Our first-half results were also adversely impacted by a number of factors including government policy changes, one-off restructuring costs and impairments. In the second half we have an ambitious growth plan, driven by immunoglobulin (Ig), albumin and our newly launched products.
Mr Lim said CSL was continuing to advance its transformation strategy and was making strong progress on cost-cutting initiatives.
CSL also announced it would extend its share buyback, increasing it from US$500 million to US$750 million.
The company also maintained its guidance for the full year of approximately 2-3% revenue growth and 4-7% net profit growth, "excluding one-off restructuring costs and impairments''.
CSL shares are looking cheap
The UBS team has reviewed the results and believes CSL shares are oversold.
Their research note sent to clients this week has the title, "A market leader at a discount'', and UBS says while CSL struggled in a number of sectors, it still retains a strong market share and is undervalued at the current share price.
UBS said that while CSL reported a 4% slump in plasma-derived therapy sales, it still held its position as the leading supplier with a market share of 31%.
UBS added regarding the flu vaccine market:
Global flu vaccine sales contracted by nearly 4% in 2025 as uptake slowed in the US. Despite the weak market, CSL Seqirus reported seasonal flu sales growth of 3% which was sufficient to take its share to roughly one third of the market. We attribute this success to the group's differentiated portfolio and entry into European markets.
UBS has a price target of $235 on CSL shares, compared with the current price of $144.95, which is near the bottom of its 12-month trading range.
CSL was valued at $70.5 billion at the close of trade on Tuesday.
