CSL: Shares Will Recover As Seqirus Drag Fades After AGM Downgrade

Analysts have nudged down their price target on CSL by A$5 to reflect slightly softer long term revenue growth assumptions and a modestly higher discount rate, even as they highlight resilient margins and view the recent selloff as an opportunity to re engage with the shares.

Analyst Commentary

Recent commentary around CSL reflects a more constructive stance on the stock despite near term earnings noise, with valuation support emerging after the sharp pullback. Analysts broadly acknowledge slower contributions from Seqirus, but see this as largely reflected in revised forecasts and the lower price target.

Bullish analysts argue that the market reaction to the AGM downgrade has been exaggerated, particularly given CSL's still solid core plasma and specialty performance, as well as management's decision to defer the vaccine demerger rather than push ahead in a challenging backdrop. They see the current share price as more than discounting the softer U.S. vaccination trends and providing an attractive entry point for long term growth in the underlying franchise.

Bullish Takeaways

• View the recent correction as overdone relative to the magnitude of the Seqirus downgrade, creating a more compelling risk reward profile at current levels.
• Highlight resilient margins and core plasma growth as evidence that execution in CSL's main franchises remains intact, supporting a premium multiple.
• See management's decision to defer the vaccine demerger as reducing execution risk in the near term, allowing focus on capital allocation and integration priorities.
• Argue that modestly lower long term growth assumptions are already embedded in consensus, leaving scope for upside if Seqirus or new products recover faster than expected.

Bearish Takeaways

• Flag persistent weakness in U.S. vaccination rates as a structural risk to Seqirus growth, which could cap group revenue momentum and justify a higher discount rate.
• Warn that repeated guidance resets around the vaccine business may undermine confidence in management forecasts, pressuring the valuation multiple.
• Caution that, while the core business is solid, near term earnings revisions are still biased lower, limiting catalysts for a rapid re rating.
• Note that investor sentiment could remain fragile until there is clearer evidence of stabilization in vaccination demand and a more visible earnings trajectory.

What's in the News

• Five year Phase 3 HOPE B data for HEMGENIX show durable factor IX activity above 36%, around 90% reduction in annualized bleeding rates, and 94% of patients remaining off routine prophylaxis, with no treatment related serious adverse events reported (New England Journal of Medicine / ASH presentation)
• CSL lowers financial year 2026 revenue growth guidance to 2% to 3%, down from a prior 4% to 5% outlook, citing weaker performance drivers in the first half (company guidance update)
• Chief Strategy Officer Ken Lim is appointed Chief Financial Officer effective 7 October 2025, succeeding Joy Linton, who will remain for a transition period before retiring (company executive announcement)

Valuation Changes

• Fair Value: trimmed modestly from A$244.20 to A$236.57, reflecting more conservative long term assumptions.
• Discount Rate: nudged higher from 6.99% to 7.03%, slightly increasing the hurdle rate applied to future cash flows.
• Revenue Growth: revised down marginally from 4.22% to 4.11% per annum, capturing softer long term top line expectations.
• Net Profit Margin: adjusted fractionally higher from 21.62% to 21.63%, indicating stable to slightly improved profitability in the model.
• Future P/E: lowered slightly from 25.0x to 24.5x, implying a modestly reduced valuation multiple on forward earnings.