Yesterday, CSL Ltd (ASX: CSL) shares remained flat after the savage sell-off earlier this week.
But the damage remains severe. The ASX healthcare giant is still down around 18% over the past three trading days, 29% over the past month, and roughly 43% year to date.
So, are CSL shares finally bottoming out or could more pain still be ahead?
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Another downgrade hurts sentiment
The latest sell-off was triggered after CSL downgraded its FY26 guidance. The company now expects FY26 revenue of US$15.2 billion on a constant currency basis and NPATA of around US$3.1 billion. That compares with FY25 revenue of US$15.6 billion and profit of US$3.3 billion.
The downgrade immediately added further pressure to already weak investor confidence.
CSL shares were once considered one of the ASX's most dependable long-term growth companies. However, over recent years the company has faced slowing earnings growth, operational challenges and multiple negative surprises.
Those issues have included weaker vaccine demand, restructuring changes and the shock departure of management leadership. At the same time, the broader market has rotated away from healthcare stocks throughout 2026, amplifying the weakness across the sector.
Why investors remain nervous
Dwindling investor confidence appears to be the biggest reason CSL shares continue falling so aggressively. For years, investors were willing to pay premium valuations because CSL consistently delivered strong earnings growth and operational execution.
That confidence has now weakened significantly. The latest guidance downgrade reinforced concerns that near-term earnings momentum remains under pressure.
CSL specifically pointed to China albumin price pressure, US immunoglobulin channel inventory normalisation and several other operational impacts affecting earnings. Importantly, investors now want proof that earnings growth can recover before sentiment improves meaningfully.
That likely means the biotech company needs to demonstrate several periods of stabilising revenue growth and stronger profitability before confidence fully returns.
Could the shares rebound?
Despite the negativity, it may still be too early to completely write off CSL shares.
CSL remains Australia's largest global biotechnology business with significant scale, strong plasma operations and leading healthcare products.
If earnings growth begins accelerating again, investor sentiment could improve rapidly. That is particularly relevant given how sharply the valuation has compressed during the sell-off.
What do analysts think?
Broker opinion remains mixed but still leans cautiously positive overall.
This week, Morgans retained their buy rating on CSL shares despite lowering their price target to $147.59. That points to a potential upside of roughly 50%. The broker acknowledged disappointment around the FY26 downgrade but noted the issues appear "primarily executional rather than structural".
Meanwhile, Bell Potter maintained its hold rating while sharply reducing its target price from $155.00 to $100.00. That target now sits only modestly above the current CSL share price of $98.79 at the time of writing.
Bell Potter noted:
We think a discount is warranted for CSL considering the declining underlying earnings outlook across FY26-27, the lack of stable management, and series of credibility hits following several disappointing results/trading updates.
For now, CSL shares appear stuck between long-term quality and short-term uncertainty.
