CSL AU

CSL Ltd

Healthcare


Presented:03/22/2021
Price:A$260.16
Cap:$92.71B
Current Price:A$301.20
Cap:$114.20B

Presented

Date03/22/2021
PriceA$260.16
Market Cap$92.71B
Ent Value$104.91B
P/E Ratio31.07x
Book ValueA$23.23
Div Yield1.08%
Shares O/S455.12M
Ave Daily Vol838,273
Short IntN/A

Current

PriceA$301.20
Market Cap$114.20B
CSL Ltd. is a biopharmaceutical company, which engages in the manufacture, marketing, and distribution of biopharmaceutical and allied products. It operates through the CSL Behring and Seqirus segments. The CSL Behring segment provides plasma therapies and conducts early stage research on plasma and non plasma therapies. The Seqirus segment involves in the production of non-plasma biotherapeutic products and develops influenza related products. The company was founded on November 2, 1961 and is headquartered in Parkville, Australia.

Publicly traded companies mentioned herein: argenx SE (ADR ARGX), CSL Limited (CSL AU), Grifols SA (GRFS), Johnson & Johnson (JNJ), Moderna Inc (MRNA), Pfizer Inc (PFE), ResMed Inc (RMD AU), The Takeda Pharmaceutical Company Limited (4502 JP) 

Highlights

The presenter is short shares of CSL Behring (CSL AU) which trades at ~AUD$261 per share or 40x NTM earnings. He believes that the pandemic has created a tough environment for CSL AU’s plasma collection business, which has resulted in double-digit declines. Increased competition on both the plasma collection and influenza vaccines business will result in significant loss of market share and corresponding revenue and profit declines. He views the near and long-term risks to the business as underappreciated by investors, and as a result, he models a 19% downside from where the stock is today to reach a price target of AUD$240 by the end of 2021.

At AUD$118B in market cap, CSL Limited operates two business segments: CSL Plasma and Seqirus. CSL AU generates ~90% of profits and 85% of revenues from its plasma business; its influenza vaccine business constitutes ~14% of revenues and 10% of the company’s total profits. 

Plasma collection was down 20% in 2020 as a result of COVID. Moreover, the cost per collection went up by 20%, split ~10-12% increased donor fees and ~8% for additional COVID preventative measures and PPE. 

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