The next couple of weeks could be crucial for the fallen healthcare giant CSL Ltd (ASX: CSL) and its shares.
CSL will release its FY26 results on 18 August. The headline profit figure is unlikely to contain a major surprise after management provided updated guidance in May. But the details surrounding that result, along with the outlook for FY27, could have a much bigger effect on investor sentiment.
That is why I will be watching CSL shares like a hawk this month.
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Is CSL Behring beginning to recover?
The first thing I will look for is evidence that CSL Behring is heading in the right direction.
In May, management said FY26 net profit after tax and amortisation was expected to be around US$3.1 billion. However, the update also showed that several important parts of the plasma business had fallen short of earlier expectations.
US immunoglobulin demand was still growing at a mid-to-high-single-digit rate, but CSL's decision to reduce channel inventory was expected to affect revenue by around US$300 million. Lower albumin market values in China were expected to reduce revenue by another US$200 million.
A recent Bell Potter note highlighted immunoglobulin, albumin, and the CSL Behring gross margin as key areas to watch.
I agree. CSL Behring has historically been the company's main growth engine, so signs of improving sales momentum and margins could provide some reassurance that the business is beginning to recover.
The long-term immunoglobulin opportunity still appears attractive. CSL estimates that only around 35% of patients across several important conditions have been diagnosed, while demand is expected to grow at a mid-to-high-single-digit rate.
The opportunity remains. I want to see CSL executing well enough to capture it.
What will CSL say about FY27?
FY27 guidance could be the most important part of the result.
According to CommSec, consensus earnings per share estimates currently stand at $8.20 in FY26 and $8.39 in FY27. Based on the current share price, CSL is trading on a price-to-earnings ratio of approximately 16 times forecast earnings.
That valuation could look attractive if earnings stabilise and growth begins to return. Another downgrade would make it harder for investors to have confidence in those forecasts.
Bell Potter believes the market remains too optimistic. The broker expects underlying profit to decline by 7% to US$2.87 billion in FY27, compared with consensus expectations of approximately US$3.1 billion.
That is a substantial difference. Clear FY27 guidance could therefore lead to another sharp change in sentiment, depending on which outlook proves closer to management's expectations.
How much pressure is coming from Vifor?
I will also be paying close attention to CSL Vifor.
Bell Potter expects Vifor to become a considerable drag on group earnings in FY27. The broker has pointed to growing competition from generic iron products, reimbursement pressure affecting Velphoro, and the difficulties surrounding Tavneos.
CSL announced in June that European regulators had recommended revoking the marketing authorisation for Tavneos in the European Union, adding another challenge for the division.
Vifor represents a smaller part of CSL than Behring, but weak performance could still offset progress elsewhere in the group.
Foolish takeaway
The August result may offer the clearest indication yet of whether CSL is finally approaching a turning point.
I will be looking for improving momentum in immunoglobulin and albumin, progress with the Behring margin, realistic FY27 guidance, and a clearer picture of the pressure facing Vifor.
At around $128.83, CSL shares look interesting. But the upcoming result could either strengthen the recovery case or show that investors need to remain patient for longer.
