CSL Ltd (ASX: CSL) shares have risen as much as 90% from their June low. At this point, the broker community can't agree on what is next for CSL shares.
The stock bottomed at $90.00 in June, an eleven-year low.
Shares closed Wednesday at $171.21 before easing to $166.89 on Thursday.
Some of that fall is mechanical, because the shares traded ex-dividend on Wednesday ahead of a $2.28 per share dividend payment on 2 October.
Image source: Getty Images
Why CSL shares recovered so quickly
The catalyst was a result that looked terrible but read rather well.
FY26 revenue slipped 1% to US$15.8 billion and the company reported a statutory net loss after tax of US$2.6 billion.
That loss included US$7.1 billion of pre-tax impairments and US$799 million of restructuring costs, most of it non-cash.
Underlying net profit after tax and amortisation fell just 2% to US$3.1 billion.
Investors had been warned.
CSL flagged around US$5 billion of impairments back in May and cut its guidance at the same time.
By August the market was ready to treat the write-downs as history.
Interim chief executive Gordon Naylor was upbeat:
FY26 has been a year of reset. We have taken decisive action and created a clear path to return to sustainable growth. Plasma market fundamentals and demand remain robust and momentum is building behind our newer therapies, such as ANDEMBRY and HEMGENIX.
What FY27 has to deliver
The bull case now rests on guidance.
CSL expects revenue to be steady in FY27 with underlying net profit growing approximately 5%.
Consensus had been closer to 2%, so the guidance was a true upgrade.
Behring is expected to grow revenue at a mid-single-digit rate, led by immunoglobulins.
Seqirus is guided to low single-digit growth as US immunisation rates soften.
Vifor is the problem, with revenue forecast to fall about 25% as iron generics enter the market.
Vifor itself was the source of most of the impairments, and it is now shrinking at a quarter a year.
The bulls argue Behring is large enough to absorb that.
The bears point out it has to do so while the group carries the cost of an unfinished transformation programme.
Where brokers disagree on CSL shares
Of 19 analysts tracked, 10 rate CSL shares a hold while nine have a buy or strong buy.
The average 12-month target is $173.04, barely above the current price.
The spread underneath that average is enormous.
The most bullish target sits at $206.76 and the most bearish at $131.49.
Foolish takeaway
The argument now is about whether a business that has just written off US$7.1 billion can compound at high single digits again.
I lean towards the bulls, largely because plasma demand has not been impacted and CSL's cost reduction programme is starting to yield results.
What I would not do is assume there is still easy money to be made.
