Executive Summary
•CSL is mid reset: FY26 revenue of $15.80b (+4% YoY) but $7.1b impairments drove a TTM net loss of -$2.58b and ROE of -15.8%, masking immunoglobulin momentum that accelerated to +14% in H2
•Vifor is the swing factor: revenue $2.4b (+3%) but guided to fall ~25% on iron generics, VELPHORO TDAPA expiry on 31 Dec 2026 and TAVNEOS revocation, capping consensus group EBIT at ~$6.9b
•Forward P/E of 18.4x sits well below the 2y average BF P/E of 38.6x, though the discount partly reflects a depressed trailing earnings base rather than pure mispricing
•The stock has rerated +50% over 3 months and +10.5% over 1 month on a guidance beat, so recovery is increasingly priced at $184.58
Financial Snapshot
•Revenue: $15.80b TTM (+4% YoY)
•Gross Margin: 51.1%
•Operating Margin: 21.5%
•Net Margin: -16.3%
•Net Income: -$2.58b TTM (includes $7.1b impairments)
•ROE: -15.8% TTM
•Debt/Equity: 66.8%
•Net Debt/EV: 0.28x
•Dividend Yield: 3.59%
•Forward EPS (NTM): $10.03
•Forward EPS Growth: -9.9%
Forward Outlook
•Consensus EBIT: $6,905.7m
•Forward EPS growth of -9.9% as the Vifor decline offsets Behring recovery
•Immunoglobulin growth of +14% in H2 FY26, with yield initiatives to lift gross margin from 51.1% toward the mid 50s over time
•Vifor revenue guided down ~25% on iron generics, VELPHORO TDAPA expiry and TAVNEOS revocation
•Plasma collection cost per litre: Not disclosed, but Horizon II studies and Kankakee IG facility construction are underway
•Andembry pediatric regulatory filings to begin H1 FY27
•Hemgenix expanding, with the first Canadian patient treated in Ontario
•Seqirus flu franchise pricing and margin contribution: Not disclosed in detail
Valuation Analysis
•NTM P/E: 18.4x (forward)
•NTM P/S: ~6.3x (MC $99.29b / revenue $15.80b)
•NTM EV/EBIT: 22.6x (forward) vs 2y avg 20.9x
•BF P/E: 29.5x vs 2y avg 38.6x (-23%, -0.2 SD)
•BF EV/EBITDA: 17.8x vs 2y avg 16.4x (+8%)
•BF EV/Rev: 6.3x vs 2y avg 5.4x (+17%)
•LF P/BV: 4.1x vs 2y avg 13.4x (-69%)
•Implied price at avg P/E: $240.97
•Implied price at avg EV/EBITDA: $168.49
•Implied price at avg EV/EBIT: $169.22
•Implied price at avg EV/Rev: $154.27
•Base case fair value: ~$210 (21x NTM EPS $10.03)
•Bull case: ~$240 (reversion to 2y avg P/E)
•Bear case: ~$160 (reversion to avg EV/EBIT)
Peer Comparison
•TAK: 35.1x Fwd P/E, plasma and pharma peer, premium multiple
•GRFS: 9.2x TTM P/E, direct plasma peer, materially cheaper
•BAX: 12.3x Fwd P/E, hospital products, lower growth
•COH.AX: 57.8x TTM P/E, medtech premium, not a direct peer
Key Risks & Catalysts
Risks
•Vifor revenue guided down ~25% on iron generics, VELPHORO TDAPA expiry and TAVNEOS revocation
•Negative net margin (-16.3%) and ROE (-15.8%) limit near term capital flexibility
•FX translation headwinds on USD denominated earnings for AUD investors
•Plasma collection cost per litre inflation could delay gross margin recovery
•Consensus target price of $137.01 sits below spot, implying sell side caution
•Further impairment risk if Vifor or gene therapy assumptions reset again
Catalysts
•Gross margin recovery from plasma yield initiatives and the Kankakee IG facility
•Andembry pediatric filing in H1 FY27 expands the HAE label
•Hemgenix gene therapy uptake and geographic expansion
•Immunoglobulin acceleration (+14% H2) continuing into FY27
•Ongoing buybacks and the US$1.5b bond raise supporting capital returns
•Alentis Therapeutics exclusive agreement for pipeline optionality
Investment Thesis
CSL is a high quality plasma and vaccines franchise working through a self inflicted reset. The $7.1b impairment and Vifor guidance cut have cleared the decks, and the market has rewarded the guidance beat with a +50% three month rally. At 18.4x forward earnings against a 2y average of 38.6x, the multiple looks cheap, but that comparison flatters a business whose trailing earnings are artificially depressed and whose forward EPS is still forecast to fall -9.9%.
The recovery case rests on three levers: immunoglobulin growth (already +14% in H2), plasma yield and cost per litre improvements lifting gross margin from 51.1%, and gene therapy plus Andembry launches adding a higher margin tail. Vifor remains the drag, with a ~25% revenue decline guided, so group EBIT of ~$6.9b is the number to watch.
I rate CSL a moderate buy with a $210 base case target, implying ~14% upside. Risk/reward is balanced given the recent rerating; I would add on any pullback toward $160 to $170, where the EV/EBIT and EV/EBITDA implied prices cluster. The key swing factors are Vifor stabilisation and the gross margin trajectory through FY27.
