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CSL shares: 3 things you need to know ahead of the 2019 AGM

As CSL’s Annual General Meeting looms, the potential of a guidance upgrade gains increased visibility from one of Australia’s top brokers.

CSL share price: AGM in focus Source: Bloomberg

When will CSL hold their 2019 AGM?

The CSL Annual General Meeting (AGM) is set to be held next Wednesday, on October 16.

The meeting will be held at The Westin Sydney and will commence at 13:00 AEST.

Key topics of the AGM

As with most General Meetings, during CSL’s 2019 AGM a number of key Board members will seek to be re-elected.

Specifically, CSL’s Board has endorsed the re-election of both Ms Marie McDonald and Dr Megan Clark AC.

Beyond re-elections, Dr Tadataka who served on CSL’s Board and was a member of the Innovation and Development Committee, is set to retire following the AGM.

Besides this, the company noted that it is currently searching for, ‘a Non-executive Director with experience in the bio pharmaceutical industry and R&D/ Product Development.’

Secondly, shareholders will have a chance to vote on CSL’s Remuneration Report, as well as the company’s ‘Grant of Performance Share Units to Executive Directors’.

A number of high profile companies – including NAB, Westpac, Telstra and Harvey Norman – all received first strikes against their Renumeration Reports in 2018. For reference, if a company receives two strikes – that is, if two consecutive Renumeration Reports receive more than 25% of votes against the report, a company is required to vote on a board spill.

CSL, for reference, has seen no such ‘revolt’ from shareholders in recent times. Coincidentally, the CSL share price has also risen in excess of 200% in the last five years and more than 600% in the last decade.

CSL share price: why the AGM matters?

Morgan Stanley – as we covered previously – has a current price target of A$251 per share and an ‘overweight’ rating on the biotech giant CSL.

A central part of this bullish thesis revolves around CSL potentially upgrading its already impressive FY20 guidance of NPAT growth of between 7 to 10%.

Importantly, though the investment bank believes it is probably too early to see a guidance upgrade during the AGM, Morgan Stanley does point out that it is common for guidance to be re-affirmed, upgraded, or downgraded during Annual General Meetings.

On this front, Morgan Stanley sees an AGM guidance upgrade as only 30% likely (with the projected share price hitting A$260) if such an event were to occur. Most likely however, with a 60% probability thinks the investment bank, is for CSL to simply reaffirm its current FY20 guidance during the AGM.

Year-to-date, the CSL’s stock has run-up 29%.

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