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CSL share price: fundamentals revisited before first-half results

We unpack some of CSL’s key fundamentals before the biotech giant reports its first-half results to the market this week.

CSL share price: the fundamentals Source: Bloomberg

CSL share price: a bullish year

As CSL's first-half profit results loom – set to be released on 12 February – we take a look at some of the biotech giant’s key fundamentals.

Centrally, when CSL reported their full-year FY19 results last August, the company revealed a strong set of figures and suggested there was more growth still to come.

Maybe it is unsurprising then that since those results were released, the CSL share price has risen around 37%.

Specifically, as part of that release, CSL reported that revenues had risen 11% and that earnings (NPAT) had grown an impressive 17%, to US$1,919 million in the 2019 fiscal year.

Earnings per share (EPS) rose in step, climbing 15% – to $4.236 per share.

The company also reported a Final Dividend of US$1.00 per share – taking CSL’s full FY19 payout to US$1.85 per share. When converted to AUD, this represents an 18% increase on a year-over-year basis.

Before noon, the CSL share price traded ~$318 per share.

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Will CSL meet, beat or miss its FY20 guidance?

Maybe most importantly, CSL’s earnings release this week will give investors, analysts and market commentators a chance to see how the company is tracking against its previously stated full-year guidance.

Expectations around the company are indeed high, with CSL currently trading at ~52x FY19 earnings – well ahead of the market average.

Elevated valuations aside, Credit Suisse today argued that they believe a guidance upgrade was 'likely'. Here, the investment bank said that 'CSL is the most likely stock in our sector to upgrade guidance,' due to 'its market leading position within the tight IG market where it is able to meet demand and achieve positive mix & pricing growth supports 11% earnings growth in FY20.'

For reference, the company had previously guided for bottom-line growth in the 7-10% range, or earnings (NPAT) of US$2,050 million and US$2,110 million.

Overall, CSL continues to be liked by analysts heading into its half-year results, with eight analysts rating the stock a buy, five a hold and one a sell.

Commenting on the company’s outlook back in August, Paul Perreault, CSL's Managing Director and CEO said:

'Demand for CSL's plasma and recombinant products continues to be strong. We expect to again outpace the market in growing plasma collections and plan to open around 40 new collection centres in FY20.'

Mr Perreault further noted that their Seqirus product, which recorded strong sales in FY19, 'is expected to continue to perform well and deliver in line with prior guidance, benefiting from product differentiation and process improvement.'

CSL currently has a market capitalisation of ~$145 billion.

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