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CSL’s outlook didn’t go down well with analysts at Goldman Sachs.


The broker said: “By reaffirming the FY21 earnings target of +3-8% despite delivering a +25% beat at 1H, CSL is now guiding to an earnings decline of (47)-(58)% in 2H21. Whilst management has likely applied more than its usual degree of conservatism amidst so much uncertainty, it is also clear that the company is having to take tougher decisions on customer allocations than we had expected to see at this stage.â€


“It has been long-understood that the plasma collection deficit would pressure FY21-22, but to see such a sharp sequential slowdown in IG during a period which was mostly unaffected by these challenges was a negative surprise to us/consensus, particularly ahead of two reporting periods which appear tougher still (1H21 volumes +3%),†it added.


As a result, the broker has downgraded its earnings estimates for FY 2022 and FY 2023 and is now forecasting “three consecutive years of single-digit earnings growth.â€


In light of this, it believes its shares are overvalued at the current level.


“At current valuation of 29.3x EV/EBITDA (vs. sector 21.6x), we no longer see sufficient upside to justify a positive stance. We downgrade to Neutral (from Buy),†it explained

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Given that plasma is a significant part of the CSL business, any attempt to boost supply, when splitting plasma into proteins such as immunoglobulin and albumin, which are used to create therapies to treat a range of conditions including immune deficiencies, would be welcome.


According to the Plasma Protein Therapeutics Association, per litre of plasma, the current industry standard is a yield of 4g of intravenous immunoglobulin. According to National Blood Authority data, CSL usually generates around 5g per litre.

The looming plasma shortage has led CSL to join forces with deep tech start-up incubator Cicada Innovations to launch a global challenge to find the best ways to meet growing demand for plasma-derived immunoglobulin therapies. To win ($40K + mentoring) individuals or team entrants only need to have a good idea. There is no requirement for the idea to be a fully functioning product.



A Sydney start up, Aegros, has refined a process called tangential flow electrophoresis; the technology, called HaemaFrac, involves specially manufactured membranes to purify proteins in an electrically charged environment. This type of fractionation allows proteins to be isolated in their native state, with very high yield while removing contaminating bacteria and viruses. Aegros claims to be able to produce 8g per litre of immunoglobulin, out of a total possible of 10g. It is aiming to list sometime and


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... while plasma collections have been difficult during the pandemic, one leading broker believes that the headwinds are easing. According to a recent note out of Citi, it believes that collection volumes will return to 2019 levels during the second half of 2021. This is thanks to the positive progress being made in the United States in respect to vaccine rollouts.


In light of this, Citi believes the recent weakness in the CSL share price has created a buying opportunity for investors. Its analysts have put a buy rating and $310.00 price target on its shares.

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Should I Buy CSL Shares 2021 Highlights Full Analysis


CSL Shares Price Today


In November of 2020, CSL reached its all-time high with a share price of 320.42. The CSL share price did not respond to the COVID crash and continued higher as the rest of the market fell. Today the share price is 305.52. This is at the upper quartile of its 52-week range of 242-320.42.


Over the past ten years, CSL is up over 810%. During this time it’s returned a breathtaking 91.09% each year. That’s 85.5% attributed to capital gains and 5.6% to its dividend return over this period. This has far outperformed the market’s total return of 64% over the same period.


About CSL Shares


CSL operates in three core areas;


CSL Behring (Plasma): This area is the largest revenue driver for the company. They are responsible for the collection and refinement of blood and blood plasma products (namely immunoglobulin and albumin). CSL Plasma is the largest collector of human blood plasma in the world. They produce a range of life-saving medicines for critically ill patients. From burns treatments to transfusions


Seqirus: Seqirus is one of the largest influenza vaccine companies in the world they manufacture and distribute of influenza vaccines annually.


CSL Behring: The final segment makes up a small portion of CSL’s business. CSL Behring also develops different treatments and drugs for rare diseases, and many Australian anti-venoms.


These three core strategies have an excellent synergy that makes CSL an excellent business.


Privatization of CSL Shares


In 1994, the Commonwealth facility was privatized as CSL Ltd. and was publicly listed and traded on the ASX. The company completed its IPO in June 1994 at just $2.30 per share.


Dividend History


CSL typically announces a dividend with the release of its half-yearly results in February and full-year results in August as seen in their financial calendar. Dividends are typically paid twice a year, in March (interim dividend) and September (final dividend).


CSL has paid biannual dividends every year since 2009. CSL does not pay a franked dividend. The current average yearly dividend for CSL shares is $2.887 giving them a yield of 0.92% at the current share price.


Fundamental Summary


In terms of fundamentals, CSL shares are relatively overvalued. Their PE multiple of 38.22 is far above the market average of 15-20x. Of course, this could be interpreted as high investor sentiments for the growth of CSL. Here’s how to interpret PE


Their PEG also reflects poor value. The company also has a very low book value of just $17.13 compared to its share price of $305.


To support their valuation the company does have an amazing ROE of 27% compared to the market average of only 12.9%. CSL has continuously delivered results and as such has developed a relatively high earnings multiple.




The general consensus within the Technical Analysis community is currently Bullish on CSL shares. The moving averages and Technical Indicators seem to indicate a Strong Buy.


In summary, the upside is likely to prevail as long as $293 is supported. The alternative scenario is that a downside breakout of $293 would call for $286 and $283.


Insider Ownership and Trading


CSL has insider ownership of 0.1%. Meanwhile, general investors own the majority 71.7%, and institutions own 28%, and the remaining 0.2% are owned by private companies.


The lack of insider ownership may seem like a red flag, however, it is important to recognize that CSL is an ex-government-owned business that has been privatized. We see that all privatized companies have the same proportion of ownerships as CSL, this includes CBA, TLS, TAH, QAN, SYD, SUN. Here’s a report by the RBA if you’re interested in privatization.


There has been some minor insider buying activity in 2021. Around $230 million in shares have been purchased by insiders in the past six months.


COVID Vaccine


CSL is contracted to locally produce AstraZeneca COVID vaccines. With the company hoping to produce 50 million doses by the end of the year. CSL is capable of producing 1 million doses per week. With hopes of increasing productivity


The Funded Deed with the Australian Government and CSL to manufacture AZD1222 vaccine is worth an undisclosed sum but estimated at around $1 billion.


It’s difficult to estimate how much CSL will profit from their COVID-19 partnership. Although Seqirus their Influenza vaccine subsidy has profited substantially, with sales up 38 percent to $US1.4 billion amid global demand for influenza vaccines in the face of the COVID-19 pandemic.


CSL Competitive Advantage


CSL operates in the healthcare sector. Their vaccine and therapies are essential to healthcare and are immune to recessionary periods which was illustrated in 2008 and again during the COVID recession.


Their strong balance sheet allows for the manufacture of new products and extensive R&D. From which they have the ability to generate positive operating cash flows and net profit. They don’t depend on investor’s capital.


They are an essential business to the Australian economy and general population. They are essential to the future of the country and will continue to be supported by the government


Should I Buy CSL Shares: Prophet’s take


CSL is a resilient business essential to the health of the Australian and larger global communities. They have shown the ability to withstand several recessionary periods and have made impressive long-term gains for shareholders.


The synergies of their business have allowed CSL to be a massive global healthcare player. This has also allowed the business to grow rapidly and respond quickly to the COVID pandemic, all while utilizing its strong balance sheet without the need for investor capital.


The current technical factors indicate a strong buy, and given the excellent business model, a premium is to be expected on CSL fundamentals. We are currently BULLISH on CSL shares.


Full article Prophet Invest


Thanks for reading

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CSL plans to devote several floors of its new 18 storey head office and research centre in Melbourne’s Parkville to a collaborative space for small biotech companies and researchers that need help to turn their ideas into businesses, chief scientific officer Andrew Nash said.


The $340 million building is part of a wave of major expansion projects the company is undertaking in Australia. Others include a $900 million new fractionation facility at the existing Broadmeadows plant to create one of the world’s largest plasma processing plants, and an $800 million plant for producing vaccines at Tullamarine.


Dr Nash said CSL and its partners in the incubator project , Melbourne University and the Walter and Eliza Hall Institute , want to model the incubator on the world’s leading precincts for medical research commercialisation, such as Boston and San Diego in the US, and Toronto in Canada.







Chris Larkins, head of operations for CSL’s Seqirus division, which produces vaccines including the AstraZeneca COVID 19 vaccine for Australia and influenza vaccines worldwide , said the company was looking at how it could help bring a self replicating mRNA COVID 19 vaccine to Australia.


Self replicating mRNA vaccines multiply in the body and can be injected in smaller quantities than non replicating vaccines. No decision has been made as to where large scale manufacturing would take place if CSL did decide to proceed to production. The new vaccine facility being built at Tullamarine could only help out after 2026, Mr Larkins said.


The plant will increase CSL’s capacity to make vaccines from cells, a laboratory process which is more effective and flexible than breeding special chickens and using their eggs to grow vaccines, and up to 90 per cent of the output would be exported to the northern hemisphere.



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