CSL Ltd (ASX: CSL) has endured one of the most turbulent periods in its recent history. CSL shares are up around 25% over the past month, but still sit roughly 51% lower over the past 12 months.
That sharp rebound raises an obvious question: is this the start of a recovery—or just a temporary relief rally in a longer downtrend?
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How did we get here?
Not long ago, CSL shares were viewed as one of the most reliable compounders on the ASX. It built its reputation on steady earnings growth, dominant global positions in plasma-derived therapies, and a track record of rewarding long-term shareholders.
But sentiment has shifted sharply. A combination of earnings downgrades, leadership transition, and roughly US$5 billion in non-cash impairments tied to the CSL Vifor acquisition has weighed heavily on confidence.
The result has been a share price collapse of more than 50% over the past year.
A strong business under pressure
Despite the price weakness of CSL shares, the underlying business remains highly defensive.
CSL is still the world's second-largest plasma-derived therapies company. It operates in an industry with high barriers to entry, strict regulatory requirements, and long-established supply chains. These structural advantages are not easily replicated, even by well-funded competitors.
CSL's latest update offered a clearer picture of current conditions. The company now expects FY26 revenue of approximately US$15.2 billion and underlying net profit after tax and amortisation (NPATA) of around US$3.1 billion, on a constant currency basis.
While these figures reflect continued growth, they also highlight near-term margin pressure and execution challenges.
The key pressure point
The biggest issue remains the US immunoglobulin business within CSL Behring. Demand continues to grow at a healthy mid-to-high single-digit rate, which is broadly in line with expectations.
However, supply constraints and pricing dynamics mean the healthcare company is not fully capturing that demand growth in real time. That timing mismatch has weighed on earnings momentum and investor sentiment on CSL shares.
What do analysts think?
Broker views are split. Morgans remains constructive on CSL shares, retaining a buy rating with a price target of $147.59, implying around 25% upside from current levels.
The team at Macquarie Group Ltd (ASX: MQG), however, is more cautious. It has a lower price target of $114 and maintains a neutral stance, citing uncertainty across CSL's core plasma and albumin businesses, as well as ongoing competitive pressures.
Foolish takeaway
The debate now centres on timing rather than business quality. CSL remains a dominant global healthcare franchise with long-term structural advantages. But near-term earnings visibility is unclear, and investors may need patience before a sustained recovery takes hold.
Management has pointed to FY27 as a key inflection point. This is supported by leadership changes and expected improvements in the Behring division. For now, CSL sits in an awkward middle ground: a high-quality business going through a difficult reset.
Whether the recent rally of CSL shares marks the beginning of recovery—or just another bounce in a downtrend—will likely depend on what FY27 delivers.
