CSL share price soars 7% on FY19 results and a bullish outlook

Enthusiastic investors bid CSL to record highs today, following the release of impeccable FY19 results and strong 2020 profit guidance.

CSL share price hits record high Source: Bloomberg

Investors bid the share price of CSL Ltd as much as 7% higher this morning, as the biotech giant reported impeccable FY19 figures and guided for net profit growth of between 7% to 10% in 2020.

With this in mind, here’s the key things you should know about CSL’s full-year results:

Record 2019 results in focus

When CSL Ltd released its 2019 full-year results to the market today, the A$99.8 billion biotech giant revealed both strong revenue and earnings growth, as well as an improved final dividend.

Overall, Paul Perreault – CSL's Managing Director and CEO – commented on the FY19 results, noting that he was:

'Pleased to report a robust result given it follows a very strong comparative period.'

Indeed, the company’s growing product line did exhibit impressive growth this year, with Mr Perreault pointing out that CSL’s 'immunoglobulin portfolio, is performing exceptionally well, with Privigen sales growing 23% and Hizentra sales up 22%.’

The company’s Albumin sales also saw ‘a strong resurgence’ in the Chinese market during the second half of 2019, with CSL observing that:

‘Global albumin sales grew 15% when compared to the previous year.'

On the bottom-line, CSL met the lofty guidance expectations that it set earlier in the year. Here, CSL reported net profits after tax of $1,919 million – driven by strong growth across the company’s core therapies.

While this growth is impressive, as the company matures, CSL has placed an ever-increasing focus on shareholder wealth creation through dividend payments.

On this front, income-focused investors were likely pleased by CSL’s announcement of a final dividend totalling $1.00 per share – or on an AUD-basis – A$1.48 per share.

The 2020 outlook gains momentum

Mind you, it was not just CSL’s 2019 full-year results that likely contributed to bullishness around the stock today.

The company, as it seems to have created a habit of doing in the last year, has guided for impressive NPAT growth of between 7% to 10% in FY20.

Mr Perreault here noted that the company now expected FY20 profits (NPAT) of between $2,050 million to $2,110 million.

CSL share price: analyst viewpoint

Ord Minnett analysts, commenting on CSL’s full-year results today, noted that though FY19 results were in-line with expectations, it was the company’s 2020 guidance that likely spurred bullish activity around the biotech’s stock during today's trading session.

Specifically, Ord Minnett pointed out that CSL’s latest profit guidance was both above their own forecasts and ahead of the Bloomberg consensus.

Even still, the broker has a price target of just A$210 per share on CSL.

The next big question

With CSL Ltd now wrapping up the 2019 fiscal year in a strong fashion, investors will likely turn their attention to a new set of questions concerning the biotech giant's 2020 prospects.

Maybe most importantly: given that CSL has again met its own lofty guidance, and has again guided for an impressive year of profits – at which point (if ever) will CSL undershoot its guidance?

And if it ever does – how will its share price fare – given that CSL already trades well ahead of the market on the basis of its price-to-earnings ratio?

Regardless of such questions: the CSL share price has been a solid performer for patient investors in 2019, rising some 23% year-to-date.

CSL's final dividend is set to be paid on Friday, October 11.


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