UPDATE: Major shifts are happening with CSL Ltd (ASX: CSL) as shares plummet following a disappointing trading update. The biotechnology giant’s stock has dropped more than 30% in recent months, raising urgent questions: Is this the right time to buy?
Just announced, analysts at Ord Minnett have downgraded CSL’s revenue growth guidance for FY 2026 to 2-3%, down from the previous 4-5%. This significant cut comes alongside a reduction in net profit growth expectations, now forecasted at 4-7%, compared to earlier estimates of 7-10%. The market is reacting swiftly, and investors are watching closely.
The decline in demand for albumin in China, attributed to Beijing’s cost-saving measures, has severely impacted CSL’s dominant Behring division. Furthermore, the company anticipates a 12% drop in vaccination rates in the U.S. market, which is expected to negatively affect its Seqirus business. With this backdrop, CSL has announced the deferral of its Seqirus spin-off, initially slated for the end of FY 2026.
Analysts are noting that the heightened volatility in the U.S. influenza vaccine market will push the proposed spin-off back until market conditions improve. This uncertainty adds to the pressures facing CSL, making the situation even more critical for investors trying to navigate the turbulent waters.
Despite some favorable currency movements, Ord Minnett has adjusted its earnings estimates for CSL downward, trimming expectations by 2.1%, 2.0%, and 1.9% for FY 26, FY 27, and FY 28 respectively. Commenting on the challenging climate, Ord Minnett stated:
“There is apparent value in CSL assuming this is the last of the major events to shake the company following a torrid few months that saw the share price slide more than 30%… Our concerns over revenue growth and the timing of margin recovery in the Behring business, however, means we maintain our Hold recommendation.”
The firm has reaffirmed a hold rating on CSL shares with a revised price target of $235.00, indicating a potential upside of 29% for investors in the next twelve months. However, this cautious stance reflects ongoing concerns over revenue growth and market dynamics.
Investors need to be aware that while CSL’s situation poses potential buying opportunities, it also carries significant risks due to fluctuating market conditions and regulatory impacts, particularly with new U.S. tariffs affecting global operations.
As this developing story unfolds, stakeholders and potential investors should closely monitor CSL’s performance and analyst updates. The question remains: Will CSL stabilize, or are further declines on the horizon?
Stay tuned for more updates on this urgent investment opportunity.
