CSL Ltd (ASX: CSL) shares are a popular option for Aussie investors.
But are they a buy at current levels?
Let's see what analysts at Bell Potter are saying about the biotechnology giant's shares.
Image source: Getty Images
What is the broker saying?
Bell Potter has been looking ahead to CSL's full-year results later this month. The broker is expecting profits in line with its FY 2026 guidance.
But the main focus may be its guidance for FY 2027, which the broker thinks will be short of consensus estimates. It commented:
We aren't expecting CSL's FY26 result in itself to contain any major surprises considering the trading update provided in May. Our NPATA forecast is in line with guidance of $3.1b. Investor attention will be monitoring for any signs of recovery across key items of Ig, albumin and Behring GM, each of which have underperformed prior expectations at both the 1H result and May trading update. Guidance for FY27 will be closely watched and we remain of the view that consensus estimates look too high. We forecast another year of earnings decline in FY27, declining -7% to $2.87b compared to VA consensus growth of +1% to $3.10b, an absolute difference of ~$230m.
Bell Potter is expecting the Behring and Vifor businesses to underperform expectations in the new financial year. The broker explains:
In particular, our forecasts for Behring (mainly Ig) and Vifor are below consensus averages. We expect Vifor – while only ~14% of the overall group – to be a considerable drag on group earnings in FY27, with headwinds being faced across multiple fronts (iron generics, Velphoro reimbursement, Tavneos withdrawal) which result in our Vifor forecasts for revenue declining ~18% and operating income declining >30%. On Ig, the recent quarterly from Grifols helped allay some fears of an oversupply in the US, and that market demand remains robust at mid-to-high single digits, however it's clear that competition among the large plasma players remains fierce.
Should you buy CSL shares?
According to the note, Bell Potter thinks that CSL shares are fully valued at current levels.
As a result, the broker has retained its hold rating on them with an improved price target of $120.00 (from $100.00).
While CSL shares are trading at a discount to peers, Bell Potter thinks that this is justified in the short term. It said:
CSL is trading on an underlying PE multiple of 14x FY26 and 15x FY27 based on our forecasts. This is a discount to global biopharma peers currently trading at a median PE of 17.1x FY26 and 15.5x FY27 following the broad ~18% rally across global pharma over the last 2 months.
Despite the strong competitive barriers that exist for plasma companies compared to conventional pharma, we think a discount for CSL relative to its peers is currently warranted due to (1) the ~2% CAGR growth outlook in the mid-term vs ~4.5% for pharma peers; (2) declining earnings expectation in FY27; (3) the lack of a permanent CEO; and (4) our forecasts remaining below consensus average. We view a 14x PE multiple as reasonable at present. Our PT therefore moves to $120, hence we maintain our Hold recommendation including the 3% dividend yield.
