Might the CSL Limited (ASX: CSL) share price be an opportunity after the healthcare giant recently released its FY21 result?
CSL’s FY21 result
A couple of weeks ago, the biotech reported that it delivered a strong full year result, with net profit after tax of US$2.375 billion – this was growth of 10% in constant currency. Revenue also increased 10% in constant currency terms.
A key driver was the exceptionally strong performance by its influenza vaccine business, Seqirus, where total revenue increased by 30% and seasonal flu vaccines rose 41%. It announced new and extended influenza pandemic agreements.
Other highlights
In the result, CSL said there were 25 new plasma collection centres opened with up to 40 new centres planned for FY22.
The healthcare company also highlighted collaboration with Terumo to deliver a new plasmapheresis platform.
Another point was that a state of the art new immunoglobulins facility has been completed in Bern, Switzerland.
A A$900 million base fractionation facility at Broadmeadows is well advanced.
New global headquarters in Melbourne are well underway.
Seqirus fill and finish expansion projects at Liverpool and Holly Springs are also well advanced.
Is the CSL share price an opportunity?
Net profit after tax for FY22 is expected to be in the range of between US$2.15 billion to US$2.25 billion at constant currency rates. That suggests a bit of a decline.
The business said the demand for CSL’s core plasma products remains robust. Not only that, but plasma collections are expected to continue improving after many initiatives that the business implemented.
Management are confident that the global rollout of COVID-19 vaccines will lead to greater social mobility and more normal conditions.
The Seqirus vaccine business is expected to continue to perform well and deliver another good year.
CSL is still seeing its profit margins being challenged because of increased plasma costs in FY22. Management see the current financial year as a transitional one as it invests to deliver on its long-term strategy.
This is a great business in my opinion. But the CSL share price is valued at 45 times the estimated earnings for the 2022 financial year according to CommSec. Even with a projected earnings recovery in FY23, it is priced at 38 times the 2023 financial year’s estimated earnings. I’d rather own CSL than many other ASX blue chip shares like Commonwealth Bank of Australia (ASX: CBA), but it doesn’t strike me as a great price today.
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