I wonder if Macquarie are reviewing their $500 call after today....

I wonder if Macquarie are reviewing their $500 call after today.

https://www.livewiremarkets.com/wires/csl-bleeds-7-billion-on-fy24-result-have-investors-overreacted



What was the key takeaway from this result?

The core immunoglobulins business is getting back to its best. FY24 is bang in line with expectations after the upward revisions early in August. That said, FY25 financial guidance was fractionally light.

2. Were there any surprises in the result that you think investors should be aware of?

The financial guidance seems conservative, given the strength of the qualitative commentary around strong patient demand, continued margin improvement and clear momentum in the core business. At the guidance midpoint, it is a 3-4% downgrade to pre-result FY25 consensus NPATA. That's why the shares are down today.

3. Would you buy, hold or sell CSL on the back of this result?

Rating: BUY

We've got a positive bias towards risk assets at the moment and quality growth businesses like CSL are right in our wheelhouse. While it's not dirt-cheap, at 30 times its earnings guidance of US $3.2-3.3 billion, which we believe is conservative, it doesn't feel stretched either. It's a buy.

4. Are there any risks to this company or the healthcare sector that investors should be aware of?

As the global economy slows, growth becomes more scarce and subsequently, more valuable. The defensive, sustainable growth characteristics CSL exhibits are likely to become increasingly appealing to investors. Throw in a declining USD and these sorts of quality, double-digit growth names are likely to outperform.

On the risk side, management has mentioned increased competition and continued softness in the vaccine market - from our perspective, at least for CSL, these are ancillary risks that can, and have historically, been mitigated by good cost control and growth in the core immunoglobulins business.

5. From 1 to 5, where 1 is cheap and 5 is expensive, how much value are you seeing on the ASX today? Are you excited or cautious about the market in general?

Rating: 2

This is almost as good as it gets. Miners are trading at cyclical lows, Industrial company earnings recovery is underway, and there is a central bank easing cycle ahead of us, with margins expanding for a lot of our investment universe.

Outside of the Big Four banks and some of the consumer discretionary sector (where we think you're picking up pennies in front of the freight train), there are a lot of stocks trading on average or below average valuations, with earnings at or near cyclical lows.