CSL earnings preview: analysts remain bullish before H1 results

CSL’s recent share price run up is most intriguing maybe because of the company’s monolithic size.

Indeed, over the last twelve months the stock has risen an enviable 69.2% and now, at a market capitalisation of ~$145 billion, represents the second largest publicly-listed company in Australia.

The Commonwealth Bank of Australia (ASX: CBA) is of course the largest, beating out CSL is terms of market value by just a couple of billion – with the bank currently valued at ~$147 billion.

All up, CSL now counts itself as the third largest biotech in the world.

Even when considering this share price run up, analysts still continue to favour CSL – on average – with 57.1% of analysts covering the stock currently rating it a buy, according to Bloomberg Data. In contrast, five analysts rate the stock a hold and only one analyst rates the stock a sell – as we head into the company’s first-half FY20 results.

In saying that, the average 12-month analyst price target may suggest that CLS has run a shade ahead of itself – at current price levels, at least. Here, and on average, analysts peg CSL’s fair value at $294.34 per share, according to Bloomberg Data.

On that estimate, investors would be looking at potential downside of ~7.5% at today’s prices.

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The dates investors need to know

CSL is set to release its first-half, FY20 results on 12 February.

Likely to the interest of income-focused investors, the company’s ex-dividend date is currently set at 11 March, with this interim dividend set to be paid on 9 April.

The biotech giant has a current annual dividend yield of 0.85%, according to the ASX.

CSL share price and the UBS thesis

UBS has been one of the most persistently bullish brokers on CSL’s prospects over the last 12-months. Even so, the investment bank notes that the biotech giant is currently trading at a significant 103% premium to the broader market (ASX 200) – on the basis of a 12-month forward consensus EPS, as we head into the company’s H1 results.

Moreover, the investment bank today noted that they were currently reviewing their price target and rating on CSL. It will be interesting to see what comes of this review and when it occurs.

Even still, UBS expects robust revenue growth in CSL's Immunoglobulin (IG) segment, remaining a key driver for the stock – with UBS forecasting +16% volume growth.

UBS is currently forecasting CSL to report first-half FY20 revenues of US$4,870.0 million, against earnings (EBITDA) of US$1,906.6 million.

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