CSL - CSL Limited
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Take it to the dad/grandpa jokes thread.
Mick
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Sorry. Yeah, I know, right?
I thought I was in the FMG thread and then realised afterwards I wasn't.
Dona Ferentes
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.. the thinking goes like this:
Novo Nordisk found a GLP-1 trial showed early signs of success in delaying the progression of kidney disease in diabetics. That set off a chain reaction directed at certain biotech stocks including Fresenius Medical Care, which is a client of CSL.
A UBS analyst points out that the kidney dialysis business only accounted for 39 per cent of Vifor, which in turn only accounts for 15 per cent of CSL of group revenue. The $7 billion fall in CSL’s market cap implied the dialysis business was worth zero ..
.. the fall is being pitched as a buying opportunity. CSL hasn’t traded below $240 since October 2019. Meanwhile, the current multiple of 24 times next year’s earnings is at 2017 levels.
Investor day today, and CSL presenting at some gabfest. Slides posted to market
Dona Ferentes
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at the presentation, CEO Paul McKenzie delivered four key messages for investors.
Firstly, CSL is still a growth machine that can grow earnings at double-digit rates over the medium term, which will help lift returns on invested capital over time. He outlined a string of new products that are near the end of trials, including a new flu vaccine and a product for acute bleeding from traumatic injuries.
Secondly, margins in the Behring business will turn around over the next few years as promised, through new donor payment structures, new collection technology and better yield (more products per litre of blood).
Third, Vifor can ward off the threat of competition to Ferinject. That’s in part because CSL is well-prepared for the loss of exclusivity, although generic competition looks limited at this stage, which the company hopes will limit price and profit erosion.
But the company is also excited about the use of the drug in a new process called patient blood management, which the World Health Organisation is now recommending to reduce the need for blood transfusions for patients with existing conditions who need surgery. CSL says it is already generating $US1 billion ($1.58 billion) in revenue from this business, with more growth possible.
And finally, McKenzie insists Ozempic is not a threat. McKenzie says CSL’s review of that study has left it comfortable it will not suffer an Ozempic hit. “When we look at all the puts and takes across the product, when we look at who was included in the clinical trial, how it affects our business, we really just don’t see it being material,” he says
Firstly, CSL is still a growth machine that can grow earnings at double-digit rates over the medium term, which will help lift returns on invested capital over time. He outlined a string of new products that are near the end of trials, including a new flu vaccine and a product for acute bleeding from traumatic injuries.
Secondly, margins in the Behring business will turn around over the next few years as promised, through new donor payment structures, new collection technology and better yield (more products per litre of blood).
Third, Vifor can ward off the threat of competition to Ferinject. That’s in part because CSL is well-prepared for the loss of exclusivity, although generic competition looks limited at this stage, which the company hopes will limit price and profit erosion.
But the company is also excited about the use of the drug in a new process called patient blood management, which the World Health Organisation is now recommending to reduce the need for blood transfusions for patients with existing conditions who need surgery. CSL says it is already generating $US1 billion ($1.58 billion) in revenue from this business, with more growth possible.
And finally, McKenzie insists Ozempic is not a threat. McKenzie says CSL’s review of that study has left it comfortable it will not suffer an Ozempic hit. “When we look at all the puts and takes across the product, when we look at who was included in the clinical trial, how it affects our business, we really just don’t see it being material,” he says
Good evening
Article published in the Financial Review this evening (16/10/23):
CSL investors backed the ASX biotechnology juggernaut’s assessment that the clinical need for drugs to treat kidney and heart diseases is much broader than the potential for drugs like Ozempic to mitigate the incidence of such ailments with severe weight loss. At a planned investor briefing articulating its strategy, CSL sought to quell concerns about the toll of GLP-1 drugs on the company’s newly integrated kidney disease business, Vifor, and its pipeline of drugs in various phases of development.
Fund Manager Prasad Patkar from Platypus: the GLP-1 debate won’t be resolved for a while. Jessica Hromas
Shares in the top-20 company eased 0.6 per cent to $239.90 on Monday, adding to a 3.5 per cent decline over the previous five sessions and a 6.3 per cent drop last Thursday alone. Platypus fund manager Prasad Patkar agreed, saying impact on CSL’s business from GLP-1s was “small if any at all”. “Generally, we think that GLP-1 panic is much greater than the actual impact that these drugs are going to have over the longer term,” he said. “That’s true not just for CSL but also a business like ResMed whose share price has been under greater pressure than CSL’s. “But the debate isn’t going to be resolved for a while.”
Platypus holds an overweight position in CSL in its Australian equities fund. As the largest ASX healthcare stock by market cap, CSL is a common holding across the market and by growth managers, including in concentrated portfolios from DNR Capital and Firetrail. Both managers list CSL as their highest conviction bet by portfolio weighting, at around 10 per cent of capital, according to Morningstar data.
Last week’s CSL sell-off was sparked when pharmaceutical developer Novo Nordisk halted a study early because the efficacy of Ozempic in treating kidney disease was immediately apparent. Kidney disease treatments account for about 39 per cent of revenue from Vifor’s business, which in turn only accounts for about 15 per cent of CSL group revenue.
Speaking at Monday’s inaugural capital markets day in Sydney, CEO Paul McKenzie addressed the sell-off head on: “There’s been a lot of talk about GLP-1s ... To give you the punchline, based on the high-level results, we do not see GLP-1s as having a material impact on the business,” he said. Echoing Mr McKenzie’s comments, Hervé Gisserot, senior vice president and general manager of Vifor, remarked the ageing population should not be overlooked in the rising incidence of kidney treatment patients. “The renal diseases market won’t be disrupted by GLP-1s,” he said.
A report by Goldman Sachs last month examined the ramifications for sleep disorder treatment manufacturers ResMed and Fisher and Paykel Healthcare, but warned “potentially significant implications for much of our coverage, not least Ramsay (private hospitals), CSL (cardiovascular, renal care/transplant, immune disorders) and Sonic (pathology).”
Outside the issues raised by the GLP-1 drug phenomenon, CSL is also facing ongoing cost pressures that have hit profits.
Before the Ozempic link was established, its shares were already in decline this year as it sought to turnaround its dominant plasma business performance which was hobbled by the pandemic. Shares are now 30 per cent down from their all-time high of $336.40, reached in February 2020.
Last month, UBS analysts slashed ResMed’s rating to neutral from a buy, citing the likely regulatory success of equivalent drugs which target sleep apnoea patients, as the reason for the downgrade.
“The stock no longer looks exceptional on growth versus US peers,” the note said.
CSL stuck with guidance of revenue growth this financial year of 9 per cent to 11 per cent at a constant currency basis, and underlying profit to lift between 13 per cent and 17 per cent, implying a range of $US2.9 billion ($4.6 billion) to $US3 billion.
Kind regards
rcw1
Article published in the Financial Review this evening (16/10/23):
CSL investors backed the ASX biotechnology juggernaut’s assessment that the clinical need for drugs to treat kidney and heart diseases is much broader than the potential for drugs like Ozempic to mitigate the incidence of such ailments with severe weight loss. At a planned investor briefing articulating its strategy, CSL sought to quell concerns about the toll of GLP-1 drugs on the company’s newly integrated kidney disease business, Vifor, and its pipeline of drugs in various phases of development.
Fund Manager Prasad Patkar from Platypus: the GLP-1 debate won’t be resolved for a while. Jessica Hromas
Shares in the top-20 company eased 0.6 per cent to $239.90 on Monday, adding to a 3.5 per cent decline over the previous five sessions and a 6.3 per cent drop last Thursday alone. Platypus fund manager Prasad Patkar agreed, saying impact on CSL’s business from GLP-1s was “small if any at all”. “Generally, we think that GLP-1 panic is much greater than the actual impact that these drugs are going to have over the longer term,” he said. “That’s true not just for CSL but also a business like ResMed whose share price has been under greater pressure than CSL’s. “But the debate isn’t going to be resolved for a while.”
Platypus holds an overweight position in CSL in its Australian equities fund. As the largest ASX healthcare stock by market cap, CSL is a common holding across the market and by growth managers, including in concentrated portfolios from DNR Capital and Firetrail. Both managers list CSL as their highest conviction bet by portfolio weighting, at around 10 per cent of capital, according to Morningstar data.
Last week’s CSL sell-off was sparked when pharmaceutical developer Novo Nordisk halted a study early because the efficacy of Ozempic in treating kidney disease was immediately apparent. Kidney disease treatments account for about 39 per cent of revenue from Vifor’s business, which in turn only accounts for about 15 per cent of CSL group revenue.
Speaking at Monday’s inaugural capital markets day in Sydney, CEO Paul McKenzie addressed the sell-off head on: “There’s been a lot of talk about GLP-1s ... To give you the punchline, based on the high-level results, we do not see GLP-1s as having a material impact on the business,” he said. Echoing Mr McKenzie’s comments, Hervé Gisserot, senior vice president and general manager of Vifor, remarked the ageing population should not be overlooked in the rising incidence of kidney treatment patients. “The renal diseases market won’t be disrupted by GLP-1s,” he said.
A report by Goldman Sachs last month examined the ramifications for sleep disorder treatment manufacturers ResMed and Fisher and Paykel Healthcare, but warned “potentially significant implications for much of our coverage, not least Ramsay (private hospitals), CSL (cardiovascular, renal care/transplant, immune disorders) and Sonic (pathology).”
Outside the issues raised by the GLP-1 drug phenomenon, CSL is also facing ongoing cost pressures that have hit profits.
Before the Ozempic link was established, its shares were already in decline this year as it sought to turnaround its dominant plasma business performance which was hobbled by the pandemic. Shares are now 30 per cent down from their all-time high of $336.40, reached in February 2020.
Last month, UBS analysts slashed ResMed’s rating to neutral from a buy, citing the likely regulatory success of equivalent drugs which target sleep apnoea patients, as the reason for the downgrade.
“The stock no longer looks exceptional on growth versus US peers,” the note said.
CSL stuck with guidance of revenue growth this financial year of 9 per cent to 11 per cent at a constant currency basis, and underlying profit to lift between 13 per cent and 17 per cent, implying a range of $US2.9 billion ($4.6 billion) to $US3 billion.
Kind regards
rcw1
Morning All esp to Donna...I salute u girl for holding CSL from way back...a inspiration/testimonial to New beginner investor.
I did some trading on this stock few yrs back, needs big capital, at that time it was in the 100plus n trying to push thru 200 post.
Back checking up on this stock this morning due to a friend seeking a guidance of how low CSL will go. Before checking this link, my answer is 200 to 230. On seeing your unselfishly posting of your holdings, I salute you again.
I had send another reply to my mate after reading yours, this mate holds CSL in Super....so just like you shld be on home run without worries, just wait to collect divs twice annually n let the noises fly around.
What's the black mark? I am in the blurr
DrBourse
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Eskys, rcw1 & Rabbit - B Careful with CSL - The bottom is still not in sight - anyone buying now is entering "Hope Trade", if you understand my meaning.....
There is still no TA, or FA reason to buy atm, CSL's recent announcements are just adding to the SP pullback....
Been posting abt CSL’s problems for the past 5mths, noboby has taken heed of my warnings, so not much point in me wasting my time trying to help anymore as most CSL Punters are blind in one eye, and cannot see out of the other…..
Crawling back into my cave now…
There is still no TA, or FA reason to buy atm, CSL's recent announcements are just adding to the SP pullback....
Been posting abt CSL’s problems for the past 5mths, noboby has taken heed of my warnings, so not much point in me wasting my time trying to help anymore as most CSL Punters are blind in one eye, and cannot see out of the other…..
Crawling back into my cave now…
Hey Doc .. I'm with you about CSL
I value & appreciate your insightful technical analysis along with as you mentioned subsequent 'warnings' ahead of time so keep it up.
Cheers tela
Now I understand after hopping back to cave...drank a glass of red n got tipsy....What's the black mark? I am in the blurr
Avro...sorry Dona...didn't mean to give you a quick s## change...hope you will forgive me..didn't wear my new Specs from Spec savers.☹Morning All esp to Donna...I salute u girl for holding CSL from way back...a inspiration/testimonial to New beginner investor.
I did some trading on this stock few yrs back, needs big capital, at that time it was in the 100plus n trying to push thru 200 post.
Back checking up on this stock this morning due to a friend seeking a guidance of how low CSL will go. Before checking this link, my answer is 200 to 230. On seeing your unselfishly posting of your holdings, I salute you again.
I had send another reply to my mate after reading yours, this mate holds CSL in Super....so just like you shld be on home run without worries, just wait to collect divs twice annually n let the noises fly around.
I am a silly rabbit. Didn't even pick up the hint until this arvo...
DrBourse
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B Careful with CSL....
Last nights ADR's CSJ down 2.16% & CSLLY down 1.44% - so our CSL on Mon 23/10 should be down just under 2% IMO - that would take CSL closer to my $223.16....
Still difficult to pick an exact CSL Bottom atm - maybe later next week CSL will start to produce a few Green Candles....
Only problem with CSL now are the ridiculous Announcements they are publishing - Harold is getting wise to CSL's Hot Air Announcements....
CSL do not need announcements, they just need to get on with their jobs, and keep their collective mouths shut, and stop telling us what they think.....
Most people want Facts.....
CSL Exec's must think they are Analysts that have to continually push "rubbish guesstimate posts" onto the general public....
Hot Air Announcements over past years worked their magic, they pushed the SP up to $342-00 at one stage when the IV was closer to $175-00....
Now that the CSL SP has been dropping for most of 2023, I reckon the CSL Execs had a Thought Bubble – Let’s try the Hot Air Programme again, Does not seem to be working this time around....
Macca's recent Foot in Mouth Announcement sent Harold running for the Exit Door.....
Maybe if CSL stop the announcements things might improve for 'dear ole CSL'....
Not much point in trying to calculate the exact CSL IV atm - But it's heading back to below the $175-00 area atm.....
I would expect the Broker and Analyst voices will be loud and clear in the near future, probably all spruiking Target Prices of $350-00 to $400-00 within the next few years, what a load of BS that would be - will Harold get sucked in again?....
Have you ever noticed that Brokers & Analysts always put forward their Target Prices, but they never publish their Intrinsic Value Prices....
So, in the recent past, when they were calling for a TP of $350-00, most educated punters, Brokers/Analysts, knew that the CSL IV was closer to $175-00....
So, when the next round of Broker/Analyst Target Prices hit the fan we should all probably mark those TP's down by 50%.....
Wonder if Harold is listening to me, on his past performance, probably not....
Crawling back into "The Cave" Now....
Cheers..
DrB.
DrBourse
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DrBourse
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Will History Repeat itself again….
CSL has seen 3 predictable Drops within 3 Zones – Look at the ? on the chart, are we now going to get 3 Tweezer Top (etc) within 3 Zones – Only time will tell, at present, if the 3rd TT does eventuate (on a bounce up to the $242.02 Line), it may well be that the following drop could be to the $223.16 Line, Hmmmmm…
Any Other Opinions out there ?
CSL has seen 3 predictable Drops within 3 Zones – Look at the ? on the chart, are we now going to get 3 Tweezer Top (etc) within 3 Zones – Only time will tell, at present, if the 3rd TT does eventuate (on a bounce up to the $242.02 Line), it may well be that the following drop could be to the $223.16 Line, Hmmmmm…
Any Other Opinions out there ?
Good afternoon @DrBourse
Personally, rcw1 didn't think the SP would drop below deck of $230.00. Today the new low of $228.65 was unfortunately achieved, so M8 the $223.16 line does look ominous bloke.... having closed today at $230.65. Makes for an interesting open tomorrow and CSLLY performance overnight.
Anyways, rcw1 has looked into da Crystal Ball, and it revealed ... promising .... clouded but promising ... as to SP breaking on through back into $250 + territory, before Xmas 2023... hmmmm
Just shot oneself in the foot now... oops
ResMed and CSL have been hit hard by the weight-loss drugs wave, but the reality is that no one knows how the GLP-1 drug landscape will play out ... (AFR Kelli Meagher 301023).
Holding
Have a very nice night.
EDIT 2023 not 2024 !
Kind regards
rcw1
Personally, rcw1 didn't think the SP would drop below deck of $230.00. Today the new low of $228.65 was unfortunately achieved, so M8 the $223.16 line does look ominous bloke.... having closed today at $230.65. Makes for an interesting open tomorrow and CSLLY performance overnight.
Anything is possible, and certainly there are interesting days ahead. Thanks for your TA, rcw1 was in denial ... and it's good that you have learnt from rcw1 ... ha ha ha ha ha; once again....
Anyways, rcw1 has looked into da Crystal Ball, and it revealed ... promising .... clouded but promising ... as to SP breaking on through back into $250 + territory, before Xmas 2023... hmmmm
Just shot oneself in the foot now... oops
ResMed and CSL have been hit hard by the weight-loss drugs wave, but the reality is that no one knows how the GLP-1 drug landscape will play out ... (AFR Kelli Meagher 301023).
Holding
Have a very nice night.
EDIT 2023 not 2024 !
Kind regards
rcw1
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