CSL at a glance: 

  • Fair value estimate: $315
  • Morningstar rating: 3 stars
  • Morningstar uncertainty rating: Medium
  • Morningstar economic moat rating: Narrow

We maintain our AUD $315 fair value estimate for narrow-moat CSL following a trading update.

CSL now expects a foreign currency headwind in fiscal 2023 of USD $230 million-USD $250 million versus previous guidance of USD $175 million.

We decrease our fiscal 2023 underlying net profit after tax forecast by just 1% to USD $2.3 billion. However, we decrease our underlying NPAT forecasts over the next three years by an average of 7%. This is largely due to unfavourable currency movements protracting CSL’s margin recovery. 

Shares in CSL closed down almost 7% on Wednesday to $287.25. 

Our $315 fair value estimate is based on an Australian dollar/US dollar exchange rate of $0.68 and a forecast five-year revenue growth CAGR of 14.9% and slight margin expansion, resulting in an adjusted five-year EPS CAGR of 15.4%.

Our forecast includes five-year immunoglobulin market growth of 9% and CSL's share of the market increasing to 33% from 30% over this period as it benefits from its investment in physical capacity and exclusivity from Hizentra in the US until fiscal 2025.

We anticipate the Seqirus vaccine business to grow at a 5% revenue CAGR over the next five years. The pandemic has buoyed the uptake of influenza vaccination and we expect this to largely continue.

Haemophilia is currently the most competitive market in which CSL operates and we forecast very limited growth based on Roche’s successful launch of Hemlibra, which requires less frequent dosing than existing CSL or competitor products. The newly acquired haemophilia B gene therapy candidate is expected to launch in fiscal 2024.

Investor subscribers can see Morningstar's full analysis of CSL here.