CSL Ltd (ASX: CSL) has long been lauded as a shining example of homegrown Australian ingenuity succeeding on a world stage, and as such, has been a mainstay in many investors' portfolios.
The narrative has unfortunately come unstuck over the past year or two, with difficulty extracting value from takeovers, operational problems, and a share price that is currently down about 59% over the past year.
Image source: Getty Images
CSL's dirty laundry gets an airing
Interim Chief Executive Officer Gordon Naylor gave an update on the business in May after conducting a 90-day review, and the share price drop of about 20% on the day – the biggest ever for CSL – gives some idea of how negative that update was.
Mr Naylor said at the time that FY26 revenue would be about US$15.2 billion, with NPATA of about US$3.1 billion.
This compares with the FY25 results of US$15.6 billion in revenue and US$3.3 billion in profit.
CSL also said it would recognise about US$5 billion in non-cash impairments across FY26 and FY27 in addition to impairments announced at its first-half results.
Mr Naylor at the time said he was confident in the future of the business, adding:
Our growth initiatives are working, but the financial benefits will take longer than previously anticipated to materialise. As a result, we have now revised down our 2026 financial year guidance. CSL's culture and people continue to be first class, the industry is stable and growing and the company has evident strengths in plasma collections and influenza vaccines. I am confident that the company can be returned to profitable growth and my work is to position the business and the next CEO for success.
Mr Naylor backed this up by buying $107,800 worth of CSL shares in late May.
Broker is positive on the future for CSL shares
UBS, in a research note titled "Could the worst be past?", makes the case that FY26 will be a low point for profitability for the company.
As they said:
We see limited risk to FY26 forecasts following the May update, with FY27 set to benefit from an easier comp after ~$300m of immunoglobulin inventory was withdrawn from the US market plus a ~$300m boost from transformation initiative savings. Despite continued competition in immunoglobulin and Chinese albumin, and a modest Behring margin recovery, we expect CSL to deliver low-single-digit underlying profit growth in FY27, consistent with our forecasts and consensus estimates. With the stock trading at a meaningful discount to the market PE and our revised $158 price target, we retain a Buy rating.
CSL shares are changing hands for $100.17 at the time of writing. The company is valued at $47.63 billion.
