---
endpoint: analytics
pattern: Healthcare
status: done
latency_ms: 432018
conversation_id: f0d6ec4b-4edb-47e4-8baf-1193ad508666
citations: 19
created: 2026-05-31 20:50:09Z
---

# Provide a one‑year narrative of CSL, outlining how business performance, market conditions, and company actions shaped investor sentiment and valuation.

# CSL Limited (ASX: CSL) — One‑Year Narrative (May 2025 → May 2026)

CSL spent the last twelve months moving from "premium defensive plasma compounder" to a deeply contested name. The path runs from a positive cyclical thesis on plasma recovery and pipeline approvals, through a confident FY25 print and a bold strategic reset (Seqirus demerger + buyback), into a CEO change and finally — earlier this month — a meaningful guidance cut and a US$5bn impairment flag dominated by CSL Vifor. The share price reflects that arc: A$239 in mid‑June 2025 [14], A$233 a day earlier [15], well below CLSA's then A$330 target [11][15], and substantially weaker after the May 11, 2026 reset.

---

## 1. May–June 2025: Setting the stage — pipeline wins, but US policy noise (CLSA: Outperform, A$330 TP)

Going into FY25 reporting season, CSL was framed as a recovery story with regulatory overhang.

**Sell‑side stance.** CLSA shifted CSL to O‑PF (Outperform) from HC O‑PF on 7 May 2025, keeping a A$330 price target and citing "near‑term uncertainty within pharmaceuticals" without changing forecasts [11]. The valuation rested on a blended 27.6x 1‑yr forward and 24.6x 2‑yr forward PE — both ~1 standard deviation below CSL's 10‑year relative average — reflecting longer‑term risks around FcRn, gene therapy, mRNA vaccines and IV‑iron generics [17]. CLSA's underlying thesis remained constructive: a multi‑year Behring recovery on plasma volume and yield, Vifor longer‑term iron upside, Seqirus as a steady contributor [18]. Forecasts pencilled in FY25 net profit US$3,171m, FY26 US$3,563m and FY27 US$3,995m, with ROE rising from 17.6% to 18.5% and net debt/EBITDA falling from 1.8x to 1.2x [19].

**Macro/regulatory overhang.** The appointment of Dr Vinay Prasad as Director of the FDA's CBER raised the prospect of stricter approvals and a heightened focus on "waste" — CLSA flagged CIDP, where IVIg is used, as a possible focus area, although CSL's rare‑disease franchise was seen as a lower‑risk target [12]. Counter‑intuitively, the same lens was positive for Seqirus: increased risk that Covid mRNA vaccines might not be approved was framed as a net positive for CSL's protein‑based flu portfolio, with little change expected for already‑approved flu products [13].

**Pipeline catalyst — ANDEMBRY (garadacimab).** On 17 June 2025, CSL secured FDA approval for ANDEMBRY for hereditary angioedema (HAE) prophylaxis. CLSA modelled a ~+10.2% 5‑year CAGR for CSL's HAE prophy portfolio (ANDEMBRY + HAEGARDA) through FY29 and a ~38bps gross‑margin tailwind to Behring by FY29 — but cautioned that early share would come from new‑patient growth rather than switches off Takhzyro [14]. Confidence on Telix and the broader portfolio kept CSL/Telix as twin pair‑trade ideas, with CSL on OUTPERFORM at A$233.10, US$74bn market cap and +41.6% upside to a A$330 target [15].

---

## 2. August 2025: A confident FY25 print and a "transformation" reveal

CSL's August 2025 FY25 result (year to 30 June 2025) was the high‑water mark of the year for narrative and sentiment. Paul McKenzie was still CEO [1], and the company combined a clean operating result with a sweeping strategic reset.

**FY25 financial scorecard (constant currency):**
- Group revenue: US$15,558m, +5% [1]
- NPATA: +14%; NPAT: +17%; FCF: +58%; final dividend: +12% [5]
- Leverage: 1.8x net debt/EBITDA [5]
- CSL Behring: ~$11.2bn revenue, +6%, with Ig +7%, albumin +7%, haemophilia +13% (HEMGENIX uptake) and HAE +4% (first ANDEMBRY sales) — partly offset by KCENTRA peri‑operative bleeding ‑10% (KCENTRA itself ‑16%) [4]
- Behring gross margin: +130bps to 51%, with management abandoning the explicit timing target for full GM recovery while reiterating double‑digit medium‑term earnings growth [4]
- CSL Vifor: +8% revenue, operating result +14%, helped by nephrology launches [4]
- CSL Seqirus: +2% revenue under a tougher backdrop [4]

**Three strategic moves announced together:**
1. **Intent to demerge CSL Seqirus** as a standalone ASX‑listed vaccines leader by end of FY26, with Gordon Naylor as Chair‑Elect — framed as creating "two global leaders in healthcare," with Seqirus described as a market leader in a US$7bn industry [2].
2. **Cost‑transformation program** targeting >US$500m of annual pre‑tax savings by end‑FY28, plus closure of 22 plasma collection centres to right‑size labour after the RIKA/iNOMI platform rollout [4].
3. **Multi‑year on‑market share buyback** reintroduced at A$750m for FY26 [3].

**FY26 guidance (issued Aug 2025):** Revenue +4‑5% @CC; NPATA +7‑10% @CC to US$3.45‑3.55bn (excluding restructuring) [3]. Behring outlook: HIZENTRA strong, PRIVIGEN softer on UK/Mexico tender losses, ANDEMBRY launch ramp, "consistent annual increases in Gross Margin through mid‑term"; Seqirus seasonal flu to "stabilise"; Vifor leveraging new launches in Germany/France/Korea [3].

This package was structurally bullish: it added optionality (Seqirus standalone), a cash return (buyback) and a structural cost lever, on top of a clean FY25.

---

## 3. Late 2025 → February 2026: 1H FY26 — CEO change, policy hits, and the first impairment

The next data point was the half‑year ended 31 December 2025, reported in February 2026 — and it changed the narrative materially.

**CEO change.** Paul McKenzie was out; Gordon Naylor was introduced as Interim CEO & Managing Director: *"Following the announcement yesterday, I'm CSL's Interim CEO. My main job is to run the business, giving the board the space to find and appoint a suitable successor"* [6]. Naylor pledged not to "take a backseat" and committed to a deep review of the last decade.

**1H FY26 operating reality.** The half was framed as adversely impacted by government policy changes, one‑off restructuring and impairments [7]:
- CSL Behring revenue: US$5,450m, ‑7% — Ig $3,046m ‑6% (Medicare Part D ~$100m drag), albumin $494m ‑27% (China policy implementation), HAE $746m, peri‑op bleeding $405m ‑12% [7][8]
- CSL Vifor: $1,236m, +12% — nephrology dialysis +40% on VELPHORO TDAPA inclusion [7] (note: chunk reference at [4] for FY25; 1H26 figures sourced from [7])
- Behring gross margin: +10bps, with HEMGENIX/ANDEMBRY accretive but offset by Medicare Part D (~100bps margin headwind on its own), albumin and KCENTRA declines [8]
- $1.5bn impairment recognised at 1H FY26 results [10]

**Capital management & guidance.** Management expanded the buyback to US$750m and maintained FY26 guidance, framing the second half as the recovery driver via Ig, albumin and newly launched products [7]. On the analyst Q&A, CFO Ken Lim guided Behring gross margin "broadly stable, marginally up" for FY26 with the medium‑term upward trend intact [8], while CCO Andy Schmeltz signalled a "modest year‑over‑year decline in albumin in FY26 with a return to growth in 2027" [8].

The 1H print effectively replaced the August "clean recovery + transformation" narrative with a "transition under policy and demand‑normalisation pressure" narrative — but with the medium‑term thesis still officially intact.

---

## 4. 11 May 2026: The reset — guidance cut, US$5bn impairment, and leadership reshuffle

The most recent — and most impactful — event of the twelve months was the Interim CEO 90‑Day Review on 11 May 2026, which materially lowered FY26 expectations.

**Naylor's framing:** *"Our growth initiatives are working, but the financial benefits will take longer than previously anticipated to materialise. As a result, we have now revised down our 2026 financial year guidance"* [9].

**Updated FY26 guidance @CC:**
- Revenue ~US$15.2bn and NPATA ~US$3.1bn (excluding restructuring and impairment costs) [19]
- Versus prior guidance: revenue ~4‑5% growth and NPATA US$3.45‑3.55bn [3] — a ~US$350‑450m NPATA cut

**Drivers of the cut [19]:**
- **US Immunoglobulin (~US$300m):** end‑customer demand still growing mid‑to‑high single digits; the hit is CSL's own channel‑inventory normalisation
- **Albumin in China (~US$200m):** market value declined while volumes stabilised and CSL share expanded
- **Other (~US$150m):** Middle East conflict, revised HEMGENIX growth and IV iron competition

Behring revenue growth is still expected to resume in 2H FY26; Seqirus is now expected to be "moderately stronger than previously anticipated" [19].

**Asset impairments — the big number.** CSL flagged an additional ~US$5bn of non‑cash, pre‑tax impairments across FY26 and FY27 on top of the $1.5bn already taken at 1H [10]. The bulk targets CSL Vifor's intangible assets — including the product portfolio — alongside under‑utilised property, plant & equipment, subject to audit and Board approval [10]. This is a major mark‑down on the 2022 Vifor acquisition and amounts to an admission that CSL Vifor will not generate the returns originally underwritten.

**Leadership/governance.**
- Global CEO search "progressing as planned"; Naylor to remain on the Board as a Non‑Executive Director once a permanent CEO is appointed [11]
- Chair succession is also in train as part of normal cadence [11]
- CCO Andy Schmeltz to retire; Diego Sacristan (ex‑US CSL Behring head) becomes CCO of Behring & Vifor from 1 July 2026 [11]
- Detailed financials at FY26 full‑year results on 18 August 2026 [11]

**Net effect on the equity story:**
- Confidence in the medium‑term Behring gross‑margin re‑expansion is preserved by management but rests increasingly on second‑half execution.
- The Vifor write‑down crystallises a long‑running market concern about the 2022 acquisition.
- Albumin China and Medicare Part D are now structural rather than transitory in the modelling.
- The Seqirus demerger and the buyback give the bull case real, separable optionality, but the path to higher NPATA is delayed.

---

## 5. Investor sentiment and valuation arc

| Phase | Sentiment driver | Implication for sentiment / valuation |
|---|---|---|
| **May–Jun 2025** | Plasma recovery thesis intact; FDA policy noise (Prasad); ANDEMBRY approval | Cautiously positive — CLSA O‑PF, A$330 TP, ~+38‑42% upside [11][15]; valuation already 1 std below 10‑yr relative PE [17] |
| **Aug 2025 (FY25)** | Strong print + Seqirus demerger + US$500m+ cost program + A$750m buyback | Re‑rating catalyst attempted; capital‑return optionality added [1][3][5] |
| **Feb 2026 (1H26)** | CEO change to Naylor interim; Behring ‑7%; Part D + albumin pain; first US$1.5bn impairment | Sentiment deteriorates; buyback expanded to US$750m to defend; guidance held [6][7][10] |
| **May 2026 (90‑day review)** | FY26 guidance cut (rev ~US$15.2bn; NPATA ~US$3.1bn); additional ~US$5bn pre‑tax impairments incl. CSL Vifor | Material negative reset; thesis pushed out by ≥12 months [9][19][10] |

**Why valuation has compressed beyond the FY25 result:**
1. The Vifor goodwill problem moved from "tail risk" to "acknowledged write‑down."
2. The US Ig channel‑inventory normalisation introduces an unusual non‑demand revenue drag for a name historically modelled on US Ig demand growth.
3. Medicare Part D's ~100bps Behring margin headwind is now a known fixture rather than a transition cost [8].
4. China albumin has shifted from a growth pillar to a market‑value contraction story.
5. The CEO vacancy and (separately) Chair succession process compound execution risk during the very period the transformation is supposed to deliver savings.

**Why the bull case is still alive:**
1. End‑customer Ig demand growth remains mid‑to‑high single digits [19].
2. ANDEMBRY and HEMGENIX are accretive, growing, and feed Behring's gross‑margin recovery [8].
3. The Seqirus demerger remains targeted before end‑FY26 [3] and Seqirus' own FY26 outlook is now "moderately stronger" [19].
4. The transformation savings target was kept (US$500‑550m per annum by FY28) [9].
5. CSL is buying back stock at a depressed multiple [7].
6. CLSA's standing constructive frame — multi‑year Behring recovery, strong rare‑disease franchise, Seqirus as steady contributor — has not been retracted in the data available here [18].

**Bottom line.** The last 12 months have been a transition from "premium plasma compounder with optionality" to "self‑help story in execution," with the CEO seat unfilled, ~US$6.5bn of cumulative non‑cash impairments flagged across 1H FY26 and FY26‑27 (most of it CSL Vifor), and FY26 NPATA reset roughly US$400m lower. The medium‑term thesis (double‑digit EPS growth, GM recovery, demerger value unlock, capital returns) is officially intact, but the market is now paying for delivery rather than expectation — a backdrop that makes the August 2026 full‑year result, the announcement of the next CEO and the formal Seqirus demerger vote the three decisive 2H26 catalysts.

---

**Sources**

- [1] CSL Limited, H2 2025 (FY25) results slides — CSL (Aug 2025)
- [2] CSL Ltd., Q4 2025 Earnings Call, 18 August 2025
- [3] CSL Limited, H2 2025 results slides — CSL (Aug 2025), FY26 guidance & demerger/buyback
- [4] CSL Ltd., Q4 2025 Earnings Call, 18 August 2025 — Behring GM, plasma centres, ANDEMBRY
- [5] CSL Ltd., Q4 2025 Earnings Call, 18 August 2025 — FY25 financial highlights
- [6] CSL Ltd., Q2 2026 Earnings Call, 10 February 2026 — Naylor as Interim CEO
- [7] CSL Limited, H1 2026 results slides — 1H FY26 segment results & guidance
- [8] CSL Ltd., Q2 2026 Earnings Call, 10 February 2026 — Behring margin & Medicare Part D
- [9] CSL Limited, Investor Update Report — 11 May 2026 Trading Update
- [10] CSL Limited, Investor Update Report — 11 May 2026, ~US$5bn impairments
- [11] CSL Limited, Investor Update Report — 11 May 2026, leadership update
- [12] CSL — O‑PF (Thunderstruck) — CLSA (7 May 2025) — 607958392LinqAlpha.PDF — Prasad/CBER risk on CIDP
- [13] CSL — O‑PF (Thunderstruck) — CLSA (7 May 2025) — mRNA vaccine risk as positive for Seqirus
- [14] CSL — O‑PF (ANDEMBRY approval) — CLSA (17 June 2025) — 607962154LinqAlpha.PDF — 10.2% HAE CAGR & 38bps GM
- [15] US Health Policy (Nothing's shocking) — CLSA (16 June 2025) — 607962115LinqAlpha.PDF — CSL OPF A$330, +41.6% upside
- [16] CSL — O‑PF (Thunderstruck) — CLSA (7 May 2025) — TP A$330, move to O‑PF
- [17] CSL — O‑PF (Thunderstruck) — CLSA (7 May 2025) — valuation methodology, 27.6x/24.6x
- [18] CSL — O‑PF (Thunderstruck) — CLSA (7 May 2025) — investment thesis
- [19] CSL Limited, Investor Update Report — 11 May 2026, FY26 revised outlook (~$15.2bn rev / ~$3.1bn NPATA)

## Citations

- [1] **06n0jrj1pmw6yq_removed.pdf** · external
- [2] **CSL Limited, H2 2025** · external
- [3] **CSL Ltd., Q4 2025 Earnings Call, 18-August-2025 8** · external
- [4] **CSL Limited, H2 2025** · external
- [5] **CSL Ltd., Q2 2026 Earnings Call, 10-February-2026 6** · external
- [6] **CSL Limited, H1 2026** · external
- [7] **CSL Ltd., Q2 2026 Earnings Call, 10-February-2026 6** · external
- [8] **CSL Limited, Investor update Report** · external
- [9] **CSL Limited, Investor update Report** · external
- [10] **CSL Limited, Investor update Report** · external
- [11] **607958392LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607958392LinqAlpha.PDF>
- [12] **607958392LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607958392LinqAlpha.PDF>
- [13] **607958392LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607958392LinqAlpha.PDF>
- [14] **607962154LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962154LinqAlpha.PDF>
- [15] **607962115LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962115LinqAlpha.PDF>
- [16] **607958392LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607958392LinqAlpha.PDF>
- [17] **607958392LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607958392LinqAlpha.PDF>
- [18] **607958392LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607958392LinqAlpha.PDF>
- [19] **CSL Limited, Investor update Report** · external

