CSL Ltd (CSL)
- Nicholas Rundle
- Feb 4
- 3 min read
CSL has long been a dream shareholding. For decades the price only seemed to go from bottom left, to top right.
I started in the investment world in 2005 and CSL wasn’t near $20. It was an amazing run.
Then it went wrong. What specifically went wrong though?
Unfortunately that isn’t a simple answer, it rarely is.
First, there was COVID-19. While many pharma companies benefited CSL had issues. Blood plasma collection requires people to be able to move freely and lockdowns prohibited this. Collections dropped sharply. And they had to pay more to entice people through the door. Margins got squeezed.
Then CSL acquired Vifor in 2022 paying a princely sum, $A16.4bn to be precise. That’s Billion, with a B. The market immediately raised their collective eyebrows. Vifor, acquired to diversify away from blood-plasma dependence, had a suite of drugs that were about to lose their orphan status, meaning cheap generics could enter the market within a few years. When generics come, margins go.
Less spoken about was a drug, CSL112, in Phase III trials. The drug was designed to boost the body’s ability to remove cholesterol from arterial plaques (via enhancing HDL function) and thereby lower the risk of repeat heart attacks or other major adverse cardiovascular events soon after an initial heart attack. You can imagine the size of that market. It was widely expected to succeed its final trial and make it to market. It didn’t, hasn’t and wont.
Questions were asked about where future growth would come from.
Then RFK Jr happened. Mr Anti-Vax. Flu vaccination rates in 2025-2026 dropped faster than a Trump tariff (and tariffs is another problem for CSL!) and they’ve remained well below prior levels.
In CSL’s last trading update CEO Dr Paul McKenzie noted:
“In our Seqirus (the flu vaccine) business, we have seen a greater decline in influenza vaccination rates in the U.S. than we expected. This is despite a positive recommendation from the U.S. administration on influenza vaccines and an unprecedented level of infection impacting public health.
This challenge impacts our forecasts, resulting in overall Seqirus revenue for Financial Year 2026 declining by mid-teens, versus our previous outlook of revenue declining by high single digit.”
This was the most recent nail in the CSL coffin.
We’ve all lived those moments in life where, when one thing goes wrong, everything else seems to go wrong too.
But it is also keeping in mind that during this “tough” run CSL has continued to grow revenue and profits.
That has resulted in CSL’s Price/Earnings (PE) ratio declining from it’s mid-40x high to a market average 17.6x
Now that fall is probably justified. A high PE ratio belongs to companies with high profit growth. Mid-teens and above is considered high and that is where CSL lived for years but since COVID it’s been a grind.
Interestingly On 7 December 2025, CSL reported positive long‑term durability and safety results from its haemophilia B gene therapy HEMGENIX. Despite the encouraging clinical data, the market ignored it.
Also in December stock analysts at Jefferies flagged an expected improvement in CSL’s albumin sales in China in the second half of FY26, a key data point for investors worried about pricing pressure in that market. The market largely ignored that too.
Sentiment is a fickle thing in markets and CSL has done a great job of eroding years of accumulated investor goodwill.
CSL now describes FY26 as a reset year. Current guidance and commentary imply: Reuters
Revenue growth: 2–3% over FY25 at constant currency, down from the earlier 4–5% outlook.
NPATA growth: 4–7%, versus the previous 7–10% range.
Seqirus: Lower contribution from avian influenza and COVID‑19 work, plus weaker US flu vaccination rates, will offset stabilisation in core seasonal influenza revenue.
CSL Behring: Expected to continue delivering robust demand for immunoglobulin and haemophilia therapies, aided by efficiency gains from the plasma network.
CSL Vifor: Management expects to maintain leadership in iron deficiency and continue building the nephrology franchise; drugs such as TAVNEOS and FILSPARI are highlighted as growth drivers.
More importantly, CSL reports next Wednesday, Feb 11, and analysts and investors alike will be watching very closely to see if the run of bad news has ended. As a long-term holder of CSL shares, your scribe certainly hopes so, but the proof will be in the plasma & profits.
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