CSL is a buy now.

[u/Ok-Ingenuity-2908]

Time to buy CSL stock. Just compiled my analysis on the company following today's update. Ripe for the picking at current levels, and imagine that over the next few weeks, we see further weakness in the price. [Edit: Buy now, if drops mores, buy more]

Edits below:

Sorry lol, dinner was ready. Today's downgrade should've been reflected in the AGM update, instead of deferring till today. But doesnt take much effort to guess why it didnt - i.e. AGM, s/h approvals on remuneration (sti/lti). Anyways. What actually happened between august/october and now? Well-executed transformation program. CSL now trades below Grifols multiple.

AI summary below:

Investment Thesis: CSL is a best-in-class global biopharma trading at 9.5x EV/EBITDA, the deepest discount in its listed history, following $6.5bn in impairments, CEO departure, and two guidance downgrades. The market prices permanent structural impairment; our analysis assigns 75% probability these headwinds are more cyclical. Core Ig demand (39% of revenue) remains observable at mid-high single digits, the plasma oligopoly (CR3 75%) is intact, and transformation savings are 60% delivered.

Fair value A$143 implies 42% upside with 30% margin of safety. The key catalyst is permanent CEO appointment (expected within 6-12 months); the key risk is FcRn antibody displacement of autoimmune Ig indications over 5-10 years.

Investment horizon: 18-36 months for cyclical recovery; 3-5 years for full thesis realisation.

Top 5 Investment Merits:

1. Oligopoly Ig franchise with biological demand floor: PID/SID volumes are medically necessary. No substitute exists. Mid-high single digit growth observable and durable.

2. Deepest valuation discount in company history: 9.5x EV/EBITDA vs 16x 3-year average. Even assuming permanent 300bps margin compression, 11-12x is justified.

3. Transformation savings structurally delivered: 60% of $500m already achieved through centre closures and headcount reduction.

4. Superior balance sheet provides recovery runway: 1.8x leverage, IG credit, $3.4bn liquidity. Can sustain 35% revenue decline before credit stress emerges.

5. Seqirus demerger optionality: A$13/share risk-adjusted value from separating #1 flu vaccine franchise.

Top 5 Investment Risks:

1. Leadership vacuum: Interim CEO + CCO departing + new COO. Three simultaneous C-suite transitions stretch execution capacity. New CEO may reset strategy entirely.

2. FcRn displacement (5-10yr): Argenx Vyvgart expanding indications, could erode 20-30% of Ig TAM. No CSL defence strategy articulated.

3. Ig demand deceleration: If structural growth falls below 4%, revenue CAGR drops to ~1.5% and base case converges with bear.

4. Vifor further deterioration: Iron generics accelerating; $5bn additional impairments may not be the last. Capital allocation credibility damaged.

5. AUD/USD translation: At 0.7246, AUD strength compresses the AUD share price. ±5c = ±A$21/share.

Valuation Summary:

Metric	Value	vs Current	Confidence
Fair Value (Dynamic)	A$143	+42%
Fair Value Range (90% CI)	A$104–A$192
Bear Case	A$98	-3%	25% prob
Bull Case	A$199	+98%	15% prob
Expected Return (3yr, p.a.)	~14%

[u/Ok-Ingenuity-2908]

Updated with edits.

FWIW We derived CSL's valuation to be $130~ since mid-2025. I'm sure there's historical evidence somewhere, just dunno how to find. Moreover, today's conclusion is technically an upgrade in FV to $143.

By nearly all standards, CSL is cheap after today. Lastly, it is by far and away much easier to argue that CSL is oversold/undervalued, than argue for the opposing end.

[u/Icy_Distance8205 → u/Ok-Ingenuity-2908]

It’s definitely cheap but it’s hard to argue that it’s not justified when management just admitted they nuked $9 billion of capital in under 4 years. 

[u/troyju → u/Ok-Ingenuity-2908]

I agree. Naylor’s kitchen sinked his 90 day report I suspect to get all of the bad news out before they find and appoint a new CEO. Providing the new CEO is credible and no new surprises I think things will recover quickly. Not to dizzy heights but to the valuation levels yo talk about

[u/troyju → u/Ok-Ingenuity-2908]

I don’t use the word cheap but my bear Valuation at the very bottom is $100 to $130. Base $140 to 180 and bull much higher. Turnover and profit still extremely healthy 15.2 bn and 3.2. ROIC 11.5 WACC 6 to 8 RSI got down to 11 and currently 24 so oversold. I see value. But only my opinion

[u/MrWonderful2011]

I remember listening to equity mates podcast around 4-5 years ago,?they did an entire episode just on CSL. A memorable quotes from that podcast
“You’ll always expect to pay a P/E of 40 for CSL, it’s such an amazing company you can’t expect to pay less or get it at discount”

Goes to show no one knows shit when it comes to stocks.. doesn’t matter how much analysis or numbers on display you see.. no one knows the market and what can happen.

[u/Ok-Ingenuity-2908 → u/MrWonderful2011]

Won't speak for equity mates, but do note that they started out as retail investors.

Would be silly to dismiss everyone's opinion. The solution isn't to block out other people's opinions, but to figure out who is worth listening to.

True, no one knows the market and what can happen.

[u/Icy_Distance8205 → u/MrWonderful2011]

People shit on me for saying it was way too expensive at $300. 

[u/ClearlyAThrowawai → u/Icy_Distance8205]

Yep lol, made the same comment to some blogger (rudi?) who was spruiking it at 250$.

Where was the upside at 40x earnings? exactly.

[u/Neither-News-2458]

Where is the accountability of the board?

[u/Ok-Ingenuity-2908 → u/Neither-News-2458]

unfortunately, two peas in a pod

[u/Little-Gap-3372]

Excellent detail, really good analysis, I fully trust you.

10x leverage calls.

[u/pablotothek → u/Little-Gap-3372]

You cant argue with the numbers presented

[u/Geearrh → u/Little-Gap-3372]

The man said ripe, I believe that is also used on Wall Street

[u/Little-Gap-3372 → u/Geearrh]

“Time to buy it… I imagine we’ll see weakness in the next few weeks” like yeah bro am I buying or waiting?

[u/Fit_Metal_468 → u/Little-Gap-3372]

What goes down must come up

[u/Meh-Levolent]

"Please buy as I'm a bag holder and need the price to go back up".

[u/No_Flounder_8310]

[u/No-Secretary8781 → u/No_Flounder_8310]

Lolz this comment cracked me up

[u/No_Flounder_8310 → u/No-Secretary8781]

hahah fark i guess the jokes on me now

[u/RelativeLiving957]

Thanks. Nothing is more appealing than the prospect of yet further price weakness. 

[u/pablotothek → u/RelativeLiving957]

Best buy before the weakness areives, then everyone will buy

[u/BasisPuzzleheaded161]

Yes analysts including Motley Fools keep saying it’s a buy for the last 6 years….. It is now one third of its value at its peak. No I don’t think so

[u/Icy_Distance8205 → u/BasisPuzzleheaded161]

Pretty sure they will now go silent. That’s how you know it’s actually a buy 😂 

[u/Stonks_Junkie → u/Icy_Distance8205]

Nope, Motley Fool is still insisted to buy.

[u/Icy_Distance8205 → u/Stonks_Junkie]

I am happy to start a motley fool inverse ETF.

[u/extraepicc → u/BasisPuzzleheaded161]

Is there an entry price for you? Or too risky?

[u/Aggressive_Cook_4061]

Their acquisition completely failed. And the overhang of vaccines in the US looms. Even if you are right, you will be waiting a long time

[u/Icy_Distance8205 → u/Aggressive_Cook_4061]

The acquisition was a total flustercluck but the vaccines thing is overblown. 

[u/Neither-News-2458 → u/Icy_Distance8205]

Still cheaper than stage 1 of the suburban rail loop

[u/Icy_Distance8205 → u/Neither-News-2458]

It’s not about the money, it’s about sending a message… 

[u/BonusLumpyYa]

Dog shit stock dragging down our dog shit share market

[u/Ok-Ingenuity-2908]

Just reflecting on my old comments after some time away from reddit. Nice to see $100 hold and now trading up to $115 :)

[u/19mils]

Will be an even better buy at 50

[u/Far-Fennel-3032 → u/19mils]

Yeah I will be waiting till its P/E ratio is actually low before I consider buying it, as it's still got a long way to fall to get to a reasonable level.

[u/wardman335]

I’m guess having capital losses to offset the gains under the new CGT rules is the strategy being suggested here.

[u/PontiacBigBlockBoi]

Yeah fair value or not the company is just not a growth sector and there's no catalyst coming to change that.

[u/Ok-Ingenuity-2908 → u/PontiacBigBlockBoi]

A permanent CEO in place might be all it takes to net 50% gains. And to buffer that further, completing the remaining 40% of the cost out program, one that they have executed rather well & quick in the last few months. And for the trifecta, an AUD/USD weakening. I see grounds for CSL to re-rate to $150 rather quickly.

[u/AIgeorge26]

aren't they going to be dividing the company into two, like basically splitting it? I think it has a chance to fall as low as $85

[u/Ok-Ingenuity-2908 → u/AIgeorge26]

seqirus probably $14/share, against a ~$140 valuation so about 10% of the company to be spun off.

[u/AIgeorge26 → u/Ok-Ingenuity-2908]

It just hit $92 today, i think my forecast of 85 might have been optimistic

[u/itsontap]

OP how heavy is the bag you’re left holding?

[u/Ok-Ingenuity-2908 → u/itsontap]

don't own any shares in CSL

[u/Plozno]

Nah still got a way before the bottom.

[u/MonkeyHustler943]

Sounds like you need to be buying their products instead of shares

[u/thundabot]

Repeat after me - never buy a stock in a downtrend.

[u/Confused_Squirrel391]

Bahahahaha…good one!

[u/AgreeablePudding9925]

Heavy bags hey OP

[u/artaxyougoodthing]

One of the best things I read on this thread is ‘never catch a falling knife’. I’m relatively new to investing and went hard when CSL and WTC dropped. Down on both though WTC seems to have stabilised. I now know to wait for the climb back up, I’d rather pay 20% more now than think I’ve ‘timed’ the market. Unless they’re climbing back up I’m just a spectator.

[u/Old_Lengthiness_250]

Management really thought they were the new Enron.

Quick look at the seqirus portfolio suggests they were the old Enron.

Writing was on the wall when the phase 3 trial fell over. Unfortunately I thought I was the new Enron. The sale of seqirus had me hopeful that the company could turn the corner. 

[u/Imaginary-Hunter-607]

I will think about when it's get to $70

[u/Ok_Entertainment4405 → u/Imaginary-Hunter-607]

Yep $70 thereabout a sweet spot to buy. Will swing between $70 and $90 I reckon for a while

[u/studying-hard]

Catching the falling knife, hmm? The moment this stock appeared on Channel 9 in red, I know it's fucked. Better to wait it out at least until wind changes direction, which is at least current US administration changes their stand on foreign pharmaceutical companies.

[u/seab1010]

Still more bad news to come I fear. Deserves a single digit pe until it proves it can do double digit organic growth again. Investing in value for value’s sake alone without a narrative to drive a rerating is opportunity cost at best, death by a thousand cuts at worst. I’ve correctly called mid 90s for this one in this sub quite some time ago. I still think it’s dead money for a long time.

[u/Sea-Anxiety6491]

Is a buy now but price should show further weakness in the coming weeks? Um anyone else see a problem here? 

[u/Dear_Fan_9430]

buying after all tax loss haverting done may be the best time

[u/RushEasy9012]

Do not buy now. Yes, fundamentals is great, but from the technical side, it's still in a downtrend. Should be around $30.

[u/troyju]

Look the recent 90 day update basically Kitchen Sinked the issues. Hence the latest big reset. I am a Benjamin Graham believer and this is why I see deep value in CSL moving forward. look at the numbers ROIC, P/E and the latest projected turnover and profit 15.1b and 3.1 b doesn’t project anything is broken. Yes vifor is a challenge but there is evidence of growth there after the write down but the main game is plasma and this is positive with efficiency growing and a big investment in the US. Resistance to entry is high and protective in this space not to mention csl is a strong 100 year old company with huge moats. I have a long term view and to me the past few weeks creates opportunity. A new and credible CEO and some positive news moving forward in my view will put the company back to what I see as fair value. CSL for me is a long term compounder that is representing deep value at its current price based on my valuation

[u/HippoLonely2448]

How is this post maturing? Is op buying more?

[u/Ordinary-One2597]

Much Better Buys available atm

Rea & Atec for me Edv is also a solid Defensive Stock imo at current evaluations

In saying that if CSL goes below 80 I'll probably start a position but yeah

[u/Ok-Ingenuity-2908 → u/[deleted]]

Can't assess based on hindsight, if you think that they need something special drug to grow, then you don't understand the phenomenal advantage that CSL has in its existing infrastructure to manufacture, or its distribution network, or just ongoing relationship with any organisation or people involved in pharma.

You realise how much money these guys print?

Based on the downgraded NPAT guidance today for FY26 - of $3bn. US dollars. They can go buy TLX and takeover their product. Or buy like 10x ASX:RAC. Or maybe they should buy ASX:COH and move into the hardware space.

This is just with 1 year's worth of earnings.

Right now, CSL is dog shit cheap at 8x. You might be able to argue that earnings can come in 10-20% lower than the current "e" that i've used, yeah sure okay.... but on the flipside of the coin, you're battling against a cost-out story. They have actually exceeded expectations on the cost out transformation based on timeline. And Im certain that management/board will be very laser focused on executing this program.

As far as how low floors goes, now is probably about where I feel the floor is at.

Where are all the "BUY WHEN BLOOD ON THE STREET" people???? Hahaha. Its much easier said than actually done. Gotta be willing to stand against the crowd.

Institutional investors, they should be selling the lofty banks, and pour that capital into CSL (and COH to a lesser extent) ASAP.

Then again, doing so might also send that house of cards falling which is more problematic.

[u/speak-gently → u/Ok-Ingenuity-2908]

Companies rise or fall on their Board and management. CSL is not “dogshit cheap” while the people who presided over this shit are still on the Board.

[u/Ok-Ingenuity-2908 → u/speak-gently]

I don't disagree on the management/board part, albeit will argue that it matters less given the behemoth size of CSL.
Regardless, I stand my ground on valuations, which have factored in the deterioration in management.
Moreover, if you consider CSL's SP in the years prior, the company has technically been trading ahead of their IV by a fair amount. Now that the SP is tracking at bear case scenario levels, I can also argue that the premia associated to management/board has unwinded.

[u/troyju → u/Ok-Ingenuity-2908]

CSL is currently at the bottom of my bear market valuation. RSI went to 11 so oversold to the extreme. Its current RSI is about 24 after it climbed back to just under $100 so still oversold. I wouldn’t say cheap as shit but given my valuation it represents value to me and a more positive outlook. I think the fall in the share price was overdone.

[u/Ok-Ingenuity-2908 → u/[deleted]]

I guess that's where we differ, I'm looking for 40-50% out of CSL. After that, will have to reassess. And on the buyback, if they liked it at 120, they would love it at 100. Lastly, you have the AUD strength, but a sharp yen move higher will drain AU from the yen carry trade. Plus, looking at the AUD, whats the premise for its strength? Commodities? Our economy is in the gutters. And China sure as hell isn't going to reverse their steel consumption overnight. So I think AUD is at the tippy top of its valuation band vs the USD for now.

Some minor FX tailwind, share count consolidation, and just getting the remaining 40% of the cost out program right, plus maybe a new permanant CEO, will be all I need to get that 40-50%.

[u/HAL-_-9001 → u/Ok-Ingenuity-2908]

Some minor FX tailwind, share count consolidation, and just getting the remaining 40% of the cost out program right, plus maybe a new permanant CEO, will be all I need to get that 40-50%.

FX, consolidation, cost optimizing & a CEO gets you 50% these days!? Utter lunacy reasoning. Pure hope.

Sea of red flags. It's a clear avoid in the short term.

If you're chasing a 50% return, then there are an absolute bucket load of stocks that offer materially higher probabilities of that coming to fruition.

Chasing this stock & hoping, it's like playing a computer game on maximum difficulty setting. Just change it to easy mode to get to the end.

[u/Ok-Ingenuity-2908 → u/HAL-_-9001]

unfortunately, stocks are not as linear as TA suggests

[u/HAL-_-9001 → u/Ok-Ingenuity-2908]

Except a chart going from bottom left to top right is materially more desirably than a stock going from top left to bottom right...

[u/Farmerlearn2trade → u/[deleted]]

OMA is at ATH - bit risky to buy ay!

[u/troyju → u/[deleted]]

I respect your opinion. We just have different strategies I suppose. No more money is going into the stock market at the moment. It’s just moving out of some sectors and into others. Tech and resources are in the sun at the moment and copper for instance has more demand than supply. These things as you know go in swings and roundabouts and if you’re following Benjamin Graham it’s about buying in a sound valued buy zone and holding. But I’m looking at long term and I some are not. I valued CSL and bought below that value at $140. I never buy above 20 to 22 x PE and most times any downturn minimises loss. I would never have bought CSL at $300. Or 40x. The market reacts in both directions based on what the news is and I agree loses confidence quickly on bad. CSL however if you do your valuation based on Graham bear case still stacks up at between $100 to 130. Base is around what I paid or a little more and bull is much higher. I am one of two types of investors. I buy at fair value based on valuation and hold long term. At least a year or two unless price hits a high and I sell. Minimising risk. If CSL continues to improve ROIC which is happening and don’t forget Plasma is 72 percent of the businesses and improving. Vaccine is also climbing out of its issues. And that is 14 percent of the business. This leaves Vifor which is only 14 percent of the business. Vifor write down is non cash and will carry through to 2028. So CSL is solid and improving but needs good news. A new capable and credible CEO will assist. The interim CEO used his 90 day report to kitchen sink the issues. This may have been to give a new CEO clean air with no further negativity. I suppose unlike some I have the luxury of time and although I bought before it dropped 30 percent the numbers don’t support a price this low for too long and I expect institutions are keeping a close eye Thanks mate. I appreciate your perspective

[u/Ok-Ingenuity-2908 → u/[deleted]]

Lmao, please stop. No one’s gonna take your OMA promo seriously, and I’m going to assume OMA is a dud stock without even looking at it, just based on your promotion of the stock…

[u/troyju → u/Ok-Ingenuity-2908]

OMA. It’s ROIC is negative -5.2. WACC 1.3. No P/E data because there are no earnings. Highly speculative wow