Where to now for CSL shares?
The post What is the outlook for the CSL (ASX:CSL) share price following FY21 results? appeared first on The Motley Fool Australia. –
The CSL Limited (ASX: CSL) share price is reacting poorly after the release of the medical giant’s FY2021 earnings results this morning. At the time of writing, CSL shares are down 2.31% to $291.08 apiece after initially popping to $302.80 per share this morning.
It seems investors don’t really know what to make of CSL’s earnings this morning.
As my Fool colleague James covered earlier today, CSL reported that revenues and net profits were both up year on year for FY21, by 9.6% and 10% respectively. This enabled CSL to boost its full-year dividend by a healthy 10% to US$2.22 a share. However, the healthcare company also gave a warning. It is expecting net profits to fall over the current FY2022 year by between 2.5% and 6.8%.
No wonder investor reaction was mixed.
So now that we know what CSL’s books look like for FY2021, what is the outlook for the CSL share price now?
What the broker says about the CSL share price
Well, one broker who was paying attention to CSL’s results this morning was investment bank, Goldman Sachs. In light of CSL’s earnings, Goldman has retained a neutral rating on CSL, with a 12-month share price target of $305. That implies a potential upside of just over 3% for the next 12 months (not including dividend returns).
Goldman noted that CSL’s 10% growth metrics on both revenue and earnings are positive, in particular from CSL’s Behring division. However, it also highlighted how the challenging conditions of the pandemic are clearly making it hard for CSL to give accurate guidance for the year ahead. Goldman also pointed to how CSL’s management has traditionally been conservative with its guidance, but that “the current conditions are clearly unprecedented”.
Going forward, Goldman sees further disruptions to CSL’s plasma collection business, the competitive threat of mRNA vaccines to the Seqirus division and plasma donor fee inflation as key risk areas to watch.
At the current CSL share price, the company has a market capitalisation of $135.6 billion, a price-to-earnings (P/E) ratio of 32.5 and a trailing dividend yield of 1%. CSL shares are currently up 3.6% year to date in 2021 so far, and a more modest 0.7% over the past 12 months.
Should you invest $1,000 in CSL right now?
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.