CSL share price: the Covid-19 impact examined

We look at how the coronavirus may impact Australia’s largest publicly listed company.

Not only did CSL last week reaffirm its already upgraded FY20 profit guidance – but at Tuesday’s closing price of $325 per share – the biotech behemoth sits only a shade off its 52-week high.

Indeed, when CSL first upgraded its full-year guidance in February, the company’s Chief Executive Paul Perreault proudly said: 'CSL is well positioned for sustainable growth.'

Sustainable growth, even in the face of global pandemic, apparently!

CSL share price: what analysts are saying

Of course, this is not to say that the coronavirus (Covid-19) situation doesn’t present a variety of unique challenges for the company.

CSL after all noted that the current situation presents a number of challenges to its plasma collection operations; and that the company expected modest delays across its capital projects and clinical trials.

UBS analysts, quantifying the impact of those challenges, estimate that CSL will see its plasma volumes contract by 5% over the next three to six month period. As a consequence of this, the company is also likely to see its 'IG/albumin volumes/sales' decline into the second half of FY21, argues UBS.

As a positive, the investment bank noted that, ‘plasma collection (as with whole blood donation) falls under the "essential services" banner, allowing those who want to donate an ability to do so.’

Even so, ‘With more US states implementing restrictions on people's movement, accessing collection centres may become more challenging for some donors.’

UBS currently has a Buy rating and a 12-month price target (PT) of $342.00 per share on CSL.

Yet even with those challenges in mind, the ever shareholder friendly biotech, stressed there was 'potential to accelerate activity post crisis to ensure no material change to original plan.'

The biotech even hit on one of the most talked up topics right now: liquidity. Here CSL assured investors it had plenty of it – specifically, around US$1.1 billion in available liquidity.

Like UBS, analysts from Macquarie argued that the impact of the coronavirus on CSL’s bottom-line is unlikely to be isolated to FY20. And though Macquarie downgraded its EPS forecasts for FY20 by just 1%, their analysts lowered CSL’s FY21e earnings forecasts by a more sizable 4%.

‘Given the lag between plasma collection and the manufacture of finished product, we see any COVID-19-related impacts over the next 3-6 months as primarily affecting earnings in FY21.’

Finally, and though the investment bank said that CSL boasts many favourable qualities, ‘we see the earnings risk associated with COVID-19/lower plasma volumes as skewed to the downside.’

Macquarie has a Neutral rating and a 12-month PT of $311.00 per share on CSL.


The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.