CSL Ltd (ASX: CSL) shares have bounced 5% this month, offering a welcome glimmer of hope after a brutal sell-off. The ASX healthcare stock remains down 24% in 2026 and a painful 51% over the past 12 months.
The next few weeks could be pivotal.
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CSL's big test is coming
CSL will unveil its FY26 results on 18 August, and while investors already have a fairly good idea of the headline profit number, the details could be far more important.
Management said in May that FY26 net profit after tax and amortisation was expected to be around US$3.1 billion.
But that update also revealed cracks in CSL Behring, historically the company's biggest growth engine. US immunoglobulin demand continues to grow at a mid-to-high-single-digit rate, but CSL's decision to reduce channel inventory is expected to knock around US$300 million from revenue.
Meanwhile, lower albumin market values in China are expected to reduce revenue by another US$200 million.
Investors in CSL shares will therefore be watching closely for signs that CSL Behring's sales momentum and margins are starting to recover.
What about CSL Vifor?
CSL Vifor could also complicate the recovery story. In June, CSL revealed European regulators had recommended revoking the marketing authorisation for Tavneos in the European Union.
While Vifor is much smaller than Behring, continued weakness could offset improvements elsewhere in the business.
Another major development to watch is CSL's planned demerger of its Seqirus influenza vaccine business by the end of FY26.
The move could potentially unlock value by allowing the businesses to pursue more focused strategies and could have a poisitive impact on the price of CSL shares.
What are brokers saying?
There are reasons for beaten-down shareholders to remain hopeful.
UBS has retained its buy rating and $158 price target on CSL shares. Based on a share price of $132.19, that implies potential upside of around 19%.
UBS believes demand in the immunoglobulin market remains robust and expects CSL's performance to improve in FY27. The broker also sees an opportunity for CSL to win back market share from rivals and has spotted early signs of a recovery in the albumin market.
Morgans is also bullish, with a buy rating and $147.59 price target. The broader analyst consensus sits at $137.84, implying more modest upside.
Foolish takeaway
CSL shares remain firmly in turnaround territory.
The FY26 result could give investors a clearer picture of whether the healthcare giant's core businesses are beginning to stabilise or whether shareholders face more pain before the recovery arrives.
With the stock down 51% over 12 months, even modest signs of improvement could give CSL shares a meaningful boost.
