ASX CSL Still Weak: Is Value Emerging?

CSL shares have had a difficult run, trading at around A$185, roughly 17% below their 52-week high of A$222.47. The key question is whether investors are still focused on the company's recent setbacks or beginning to look beyond them.

Here’s what has happened, what remains uncertain, and what investors may want to consider.

How CSL Got Here

Management described FY26 as a reset year, and the results reflected that assessment. Revenue fell 1% to US$15.8 billion, while underlying NPAT declined 2% to US$3.1 billion.

The statutory result was significantly weaker, with CSL reporting a US$2.6 billion net loss. Two major factors contributed: US$7.1 billion in pre-tax impairments and another US$799 million in restructuring costs. Most of the impairments related to CSL Vifor, the iron deficiency and dialysis business acquired in 2022.

An impairment is similar to buying a property and later discovering that its value is significantly below the purchase price. Although the charge is non-cash, it signals that an investment has not performed as expected.

Why CSL Shares Rose Despite the Loss

On 18 August, the day CSL reported its statutory loss, the shares rose approximately 16% to A$156.68. Investors appeared to focus more on the outlook than on the disappointing FY26 result.

For FY27, CSL expects underlying NPAT growth of around 5%, ahead of the roughly 2% growth the market had anticipated. Group revenue is expected to remain broadly flat.

The outlook varies across its businesses:

• CSL Behring: Mid-single-digit revenue growth expected.

• Seqirus: Low-single-digit revenue growth expected.

• CSL Vifor: Revenue expected to decline by approximately 25%.

The share-price reaction reflected expectations for future earnings rather than an improvement in the reported FY26 figures.

What Else Is Supporting the Recovery?

Cost savings

CSL delivered US$176 million in savings during FY26 and is targeting US$400 million in FY27. The company aims to increase savings to as much as US$550 million by FY28, with part of the savings expected to be reinvested in growth.

Share buybacks

CSL bought back approximately A$1 billion worth of shares during FY26. A further A$1.1 billion buyback has been approved for FY27.

Buybacks reduce the number of shares outstanding and can support earnings per share, although their overall benefit depends on the price paid and the company's financial performance.

Plasma collection efficiency

On 8 October, CSL announced plans to move all its US plasma centres onto Haemonetics' latest collection devices by the end of 2027. This is one of several initiatives aimed at improving operational efficiency.

However, CSL did not provide specific targets or quantify the expected financial impact of this change.

What’s Confirmed So Far?

• FY26 results: Underlying NPATA was US$3.1 billion, down 2%, while CSL reported a US$2.6 billion statutory net loss following US$7.1 billion in impairments.

• FY27 outlook: Underlying NPAT growth of approximately 5% on broadly flat revenue.

• Vifor outlook: Revenue is expected to fall around 25% in FY27, with approximately US$200 million in further impairments anticipated.

• Share buyback: A$1.1 billion approved for FY27.

• Upcoming dates: The AGM is scheduled for 27 October 2026, with half-year results due on 10 February 2027.

What Could Still Affect the CSL Share Price?

1. Delivering FY27 earnings growth

The main test is whether CSL can deliver the growth management has forecast. The expected 5% increase in underlying NPAT is guidance, not a confirmed result.

Achieving it will depend partly on delivering cost savings on schedule and maintaining stable plasma operations. Any shortfall could put renewed pressure on the shares.

Before the August announcement, CSL shares had fallen following five consecutive results, highlighting the market's sensitivity to the company's performance.

2. Continued weakness at Vifor

Vifor remains a concern. A projected 25% revenue decline in FY27, alongside the possibility of further impairments, could continue to weigh on group performance.

3. The delayed Seqirus demerger

The proposed Seqirus demerger has progressed more slowly than some investors had hoped. Uncertainty remains over the timing and eventual structure of the transaction.

4. Valuation and recovery expectations

At around A$185, data providers indicate a forward price-to-earnings ratio of approximately 21 and a dividend yield near 2.2%.

These levels are below CSL's historical valuations, but that alone does not establish that the shares are cheap. Some analyst price targets are also close to the current share price, suggesting that part of the expected recovery may already be reflected in the valuation.

5. Currency movements

CSL reports its financial results in US dollars, while its shares trade in Australian dollars. Changes in the exchange rate can therefore affect how its reported performance and valuation appear to Australian investors.

Key Takeaways

• CSL remains below its 52-week high, despite a recovery following its August results.

• The rebound reflected FY27 earnings guidance, planned cost savings and share buybacks rather than an improvement in FY26 earnings.

• Vifor's performance, the timing of the Seqirus demerger and delivery on cost-saving targets remain important uncertainties.

• Whether CSL offers value at current levels depends on its ability to meet FY27 expectations and the valuation investors are willing to pay for that recovery.

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