CSL 1H2022 Earnings Preview: Where next for CSL stock?

COVID-19 has been a headwind for CSL's supply chains and the collection of plasma, an essential raw material used to produce many of CSL's therapies, which account for almost half of CSL's sales. Based on Q3 reports from Japanese competitor Takeda last week, which showed a sizeable reduction in plasma collections, the Covid-19 headwinds are yet to ease.

As part of its plan to diversify earnings and promote long-term growth, CSL is buying Swiss Bio-Tech giant Vifor Pharma for $11.7 billion. Vifor Pharma specialises in iron deficiency and kidney disease. Once the buyout is complete, Vifor's research and development team and pipeline will complement CSL's own.

To help fund the deal, a $6.3bn capital raise was launched in December at $273. As CSL shares are currently trading below the price, a calculation is applied based on a 2% discount to the stock's average price for the five days leading up to the close of the offer. At this point, the price of the raise will be around $255.00 when it closes next week.

Also weighing on the share price a global selloff in growth stocks that commenced in late November. This has resulted in the price/earnings ratio of CSL falling from 44X FY 22s earnings to 37X, offering a more attractive valuation.

At its Annual General Meeting in October, CSL said at a group level they expect revenue growth to be in the range of 2 to 5% over FY21 at constant currency (USD), and net profit after tax (NPAT) was expected to be approximately US$2.15 to $2.25 billion at constant currency.

The market consensus is for CSL to report earnings (NPAT) of A$1.46 billion for 1H2022, with an interim dividend payout of US$1.13 per share.

CSL Daily Chart

Technically, the decline from the $342.75 high of February 2020 appears to be a countertrend after a stunning multi-year rally. Once the correction is complete, the uptrend is expected to resume.

As such, consider buying CSL shares on a dip into support near $240/230, coming from trend channel support, looking for a retest of resistance at $320.00

Source Tradingview. The figures stated areas of the 4th of February 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

Open a Forex.com account, or log in if you’re already a customer.
Search for the pair you want to trade in our award-winning platform.
Choose your position and size, and your stop and limit levels.
Place the trade.

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.