"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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"Like I've just written on another thread, CSL expensed US$1.1B...
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Last
$286.28 |
Change
1.180(0.41%) |
Mkt cap ! $138.6B |
Open | High | Low | Value | Volume |
$285.01 | $287.35 | $283.85 | $246.0M | 861.0K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 2265 | $285.68 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$286.28 | 4885 | 3 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 2265 | 285.680 |
1 | 1000 | 285.080 |
1 | 500 | 284.810 |
1 | 60 | 284.800 |
2 | 1000 | 284.750 |
Price($) | Vol. | No. |
---|---|---|
286.280 | 4885 | 3 |
286.290 | 8037 | 4 |
286.350 | 2698 | 1 |
286.430 | 998 | 2 |
286.500 | 1072 | 2 |
Last trade - 16.10pm 30/09/2024 (20 minute delay) ? |
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