Why the CSL share price rose on Thursday

CSL share price up on interim report

Despite concerns over plasma collection performance, analysts remained bullish on CSL heading into its first-half results, with the stock carrying an Overweight rating, on average, according to the Wall Street Journal.

This comes even as the biotech has struggled in the last six months, with the stock trading flat in that period.

Share price gyrations aside, CSL handed down a strong set of interim results on Thursday, revealing a surge in profits and a stable, but growing, dividend. Investors seized on this report, with the stock opening at the $295 mark. While the stock traded lower following that morning 'pop', it remained up 3.23%, at $290.24 per share by the afternoon session.

On the bottom-line, the biotech giant said that its net profits after tax (NPAT) hit USD$1,810 million, representing a year-over-year increase of 44%, on a constant currency basis. Earnings per share grew in step, also up 44%.

Group sales hit US$5.7 billion in the half, up 15% on a constant currency basis.

Looking at some of the company's operational highlights, CSL's Seqirus business arm reported total revenue growth of 38%, while seasonal influenza vaccine sales rose an impressive 44%.

For income focused investors, CSL continued to raise its dividend, declaring an interim dividend of US$1.04 per share, an increase of 9%.

CSL share price: The outlook

Despite that growth, commenting on the expectation for Seqirus’ performance in the second half of FY21, CSL’s CEO, Paul Perreault said:

‘Seqirus is performing well as strong demand for influenza vaccines together with our differentiated products portfolio will see it deliver another strong profitable year. Consistent with the seasonal nature of the business we anticipate, however, a loss in the second half of the year.’

Commenting more broadly on the impact that the pandemic will continue to have on the company as well as the strategies CSL is implementing to mitigate this impact, Mr Perreault said:

'COVID-19, however, will continue to have an impact on CSL. Our plasma collections have been adversely affected during the pandemic. To combat this, we have implemented a number of initiatives to increase plasma collections and introduced a customer fulfilment process to ensure the equitable distribution of medicines to patients.'

Looking ahead, for the full-year management said they expected CSL to reported total FY21 net profit, after tax, of between US$2,170 million and US$2,265 million – on a constant currency basis.

Broker thoughts

Wilsons, who remain Overweight on the stock said today's interim results were 'materially ahead of our forecasts and consensus.’ The broker also reiterated its $345 price target on CSL, while saying they expected the biotech’s full-year net profits to come in at US$2,300 million – a figure that represents the top end of CSL’s guidance range.