"Like I've just written on another thread, CSL expensed US$1.1B in research and development which was an increase of 10% from the previous years R&D spend.
If they cut that spend by a half and put the US$550M in the NPAT column to ensure that they easily beat consensus, then the SP would be closer to $350 rather than $250."
For starters, US$550m would not drop down to NPAT, because it would need to be tax affected.
Second, the R&D spend is what drives the growth.
And it is the market's expectation of a certain level of growth that informs the valuation multiple.
Ergo:
1.) Less expenditure that drives growth implies lower rate of growth.
2.) Lower rate of growth implies lower valuation multiple.
When it comes to valuation theory, there's no such thing as a free lunch, I'm afraid.
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Last
$308.00 |
Change
-0.490(0.16%) |
Mkt cap ! $148.5B |
Open | High | Low | Value | Volume |
$309.00 | $309.00 | $307.26 | $21.30M | 69.05K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
2 | 21 | $307.99 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$308.00 | 410 | 6 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
4 | 29 | 307.570 |
6 | 37 | 307.560 |
2 | 14 | 307.550 |
4 | 21 | 307.540 |
2 | 103 | 307.530 |
Price($) | Vol. | No. |
---|---|---|
307.690 | 73 | 5 |
307.730 | 29 | 2 |
307.740 | 42 | 4 |
307.750 | 14 | 2 |
307.760 | 25 | 1 |
Last trade - 11.02am 22/08/2024 (20 minute delay) ? |
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CSL (ASX) Chart |