CSL Target Price Raised 7.7% to A$324.40/Share by Morgans CSL.AU*DJ CSL Price Target Raised 4.8% to A$325.00/Share by Citi CSL Price Target Cut 1% to A$302.00/Share by Goldman Sachs CSL Price Target Cut 1.7% to A$327.85/Share by Jefferies
CSL Ltd.'s pace of plasma collections is expected to exceed pre-coronaviruslevels in coming months, reversing a decline earlier in the pandemic when lockdowns andother restrictions made it difficult for people to donate, Chief Executive Paul Perreaultsaid in an interview. Australia-based CSL runs one of the largest networks of plasma-collection centers inthe U.S. and plasma-derived products make up much of the company's revenue. The therapiescan be lifesaving for patients suffering from immune disorders and other conditions. Manyneed immunoglobulin, which contains antibodies harvested from plasma. CSL reported earnings for its fiscal year 2021 ended June on Wednesday and said thatplasma collection fell 20%. It can take months for raw plasma to be manufactured intoimmunoglobulin, so that decline will impact FY 2022 earnings. The company said it expectsnet profit in FY 2022 to be in the range of US$2.15 billion-US$2.25 billion, comparedwith FY 2021's net profit of US$2.37 billion. Despite the decline in collections, Mr. Perreault expects the pace of plasmacollections to exceed 2019 levels around December. He cautioned that is dependent on manyfactors outside the company's control, including the Delta variant of the coronavirus,which is leading to a surge in cases in the U.S. But he said there is no evidence thatDelta is impacting collections right now. Some analysts have been closely tracking foot traffic around CSL plasma-collectioncenters to get a sense for the volume of collections. After Wednesday's earnings result,some analysts said they expected the stock to trade lower due to the weaker guidance andconcerns around collections. CSL's Australia-listed shares were about 2% lower in middaytrade Wednesday. CSL, which pays people to give plasma, has implemented several initiatives to increasedonations, including raising fees paid to donors. The company has also enhanced marketingto attract new and lapsed donors and adopted new technologies such as a donor app. It hasalso reduced its hold period on recently collected plasma from 60 to 45 days. The company opened 25 new plasma collection centers in FY 2021 and plans to open up to40 new centers in FY 2022. Prior to the pandemic, plasma collections had been risingannually as companies increased their network of collection centers. "We will return to growth," Mr. Perreault said. "This is a blip for us and our strategyremains intact. Our investors expect us to grow, I expect us to grow." Any decline in plasma collections can be worrying for patients who need plasma-derivedtherapies. Mr. Perreault said there hasn't been any noticeable shortages in the U.S., inpart because competitors have moved in some product, though supply in other places likeEurope and emerging markets has been tighter. CSL also warned that increased plasma-collection costs will hurt margins going forward.
CSL Price at posting:
$293.56 Sentiment: Buy Disclosure: Held
(20min delay)