CSL (CSL) reported its 2026 profit results in what was the most eagerly awaited result in the entire August season, with those long encouraged by competitor results in the USA and the shorts ($110M added last week alone) looking for more misery and downgrades. The HNW Core Portfolio holds a 6% weight to CSL.

Key Points:

  • Profits Down: CSL profits were down -2% to US$3.1 billion in line with guidance, though ahead of market expectations.  In the second half, CSL saw a recovery in Ig and albumin sales, with the new plasma drugs Andembry and Hemegnix (both treat haemophilia) seeing strong sales in their first year on the market.  CSL’s flu business grew despite lower US immunisation rates, the only global flu vaccine company to report growth.
  • Still no CEO: Temporary interim CEO Naylor remains as a global search continues. 
  • Restructuring done: CSL have seen $176M in benefits in FY26 and expects $400M in FY27 from their restructuring program reducing headcounts and duplicate R&D sites.
  • Dividend flat: US$2.92 per share, representing a payout ratio of 45%
  • On-Market Share Buyback: CSL management announced a new $1.1 billion on-market buyback, citing strong cash flows over the last 12 months, on top of the $1 billion completed last year at an average price of $166. This will see EPS grow ahead of headline profits.
  • Why is the stock up? CSL saw 7% growth in plasma in the second half, which was pleasing, with the buyback and guidance for profit growth pleasant surprises.
  • Guidance: CSL management guided to US$11 billion in revenue with 5% profit growth in the coming year, ahead of market expectations of no growth or another downgrade.

 

Portfolio Strategy: CSL is a world leader in manufacturing medicines from human blood and flu vaccines, and, along with Sonic Health, is a core healthcare position in the Portfolio. The business faces substantial barriers to entry and sells non-discretionary, life-saving drugs and, in Australia, holds exclusive rights to produce blood plasma-derived medicines. The company earns over 90% of its profits offshore and benefits from a falling AUD.

 

CSL looks to be exiting the investment doghouse at the moment,  showing a path to recovery. However the stock still looks cheap, trading at a large discount to the ASX on a PE of 14x with a 3.1% dividend yield. In June we increased our weight to CSL at $114 per share.

 

CSL finished up +17% to $157.82