---
endpoint: analytics
pattern: Healthcare
status: done
latency_ms: 182072
conversation_id: 17317ba2-dbc9-4ba6-9755-33149dc93224
citations: 0
created: 2026-05-31 18:21:43Z
---

# How does CSL’s valuation compare to peers, and what justifies its premium/discount?

## CSL Limited (CSL AU) — Valuation vs Peers and the Discount Justification

### Scope and corpus note
The user's CLSA archive contains CSL-specific coverage from **CLSA parent** (analyst Zhijie Zhao; CSL is ASX-listed, so this is not CLST-subsidiary coverage). The most recent dedicated CSL note in the archive is dated **17 Jun 2025**, ~11 months stale relative to today (31 May 2026); the framework and ratings below reflect that vintage. CLSA's archive does **not** contain an explicit global plasma-peer (Grifols / Takeda / Octapharma) comp table for CSL — its valuation methodology benchmarks CSL against its **own 10-year history relative to the ASX100 ex-resources, financials and REITs**, not against global pharma peers.

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### 1. Headline CLSA valuation framework

CLSA values CSL on a **blended 1- and 2-year forward PE**, set at a level explicitly **one standard deviation BELOW** CSL's own 10-year trailing average relative PE versus the ASX100 ex-resources/financials/REITs benchmark [1]:

| Metric | CLSA assumption |
|---|---|
| 1-yr forward PE | **27.6x** (1 std below 10-yr trailing avg PE-Rel) [1] |
| 2-yr forward PE | **24.6x** (1 std below 10-yr trailing avg PE-Rel) [1] |
| 12-month price target | **A$330.00** [3] |
| Implied upside (at note publication) | **+38%** [3] |
| Rating | **O-PF (Outperform)** — Zhijie Zhao, 12 Mar 2025 [2] |

So mechanically: **CSL is trading at a discount to its own historical relative-PE premium**, and CLSA is willing to underwrite a target at the lower end (-1σ) of its own historical range — not at the long-run mean. The rating is constructive (38% upside) only because the spot price has compressed further than even CLSA's conservative -1σ multiple.

---

### 2. Why CSL has historically traded at a premium (to its domestic peer set)

The 10-year PE-Relative benchmark assumes CSL's structural premium versus the ASX100 ex-resources/financials/REITs is real and persistent. The premium is supported by the operating profile in CLSA's model [4]:

| Year to 30 June | FY23A | FY24A | FY25CL | FY26CL | FY27CL |
|---|---|---|---|---|---|
| Revenue (US$m) | 13,310 | 14,800 | 15,761 | 16,702 | 17,698 |
| Net profit (US$m) | 2,610 | 2,907 | 3,171 | 3,563 | 3,995 |
| EPS growth YoY | 12.4% | 11.1% | 8.9% | **12.4%** | **12.1%** |
| **PE (x)** | 31.0 | 27.9 | **25.6** | **22.8** | **20.3** |
| **ROE (%)** | 17.2 | 17.5 | 17.6 | **18.1** | **18.5** |
| FCF yield (%) | 1.7 | 2.4 | 2.6 | 3.7 | **4.0** |
| Net debt/equity (%) | 59.9 | 54.3 | 48.4 | 39.3 | 31.2 |

Source: CLSA estimates [4].

**What justifies a structural premium:**
- **Compounding EPS growth re-accelerating to low-teens** by FY26-27CL (12.4% / 12.1%) — atypically high for an ex-resources/financials Australian large cap [4].
- **ROE rising from 17.2% to 18.5%** through the forecast horizon while the balance sheet deleverages (net debt/equity falling from 60% → 31%) [4].
- **Self-funded reinvestment** — FCF yield expanding to 4.0% by FY27CL even after the Vifor integration capex [4].
- **Late-stage pipeline catalysts**: the 17-Jun-2025 note specifically anchors a fresh upside lever — FDA approval of **ANDEMBRY (Garadacimab)** for HAE prophylaxis, with CLSA modelling a **+10.2% 5-yr CAGR for the combined ANDEMBRY + Haegarda HAE prophy portfolio through FY29CL**, plus a Behring gross-margin benefit of **+38bps by FY29CL** [5].

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### 3. Why CSL is currently trading at a discount to its own history (the "-1σ" choice)

CLSA explicitly chose to set the target multiple **one std below** the 10-year trailing average PE-Relative, citing **"slower-than-expected recovery post Covid"** as the operative reason [1]. In plain terms — the franchise's secular premium hasn't fully re-rated back because:

- **Plasma collections and gross-margin normalisation has trailed expectations**, weighing on near-term earnings power even as collections have recovered in volume.
- **FY25CL EPS growth of 8.9%** [4] is the weakest in the forecast window — a deceleration vs FY23/24's 11–12% pace — and is the actual quantitative anchor of the "slower recovery" thesis. CLSA only sees the cadence step back up to 12%+ from FY26CL.
- **Investment risks** still on the radar that prevent a premium-historical multiple [6]:
  1. R&D / commercialisation conversion risk (unfruitful pipeline candidates).
  2. Patient safety and product-quality controls in biologics manufacture.
  3. Manufacturing-network concentration and natural-disaster / outage exposure.
  4. **Plasma supply continuity** — donor network management; output and reputation linked to a steady, safe plasma flow.
  5. Cybersecurity and IP/data risk on proprietary R&D systems.

The premium-vs-history debate effectively reduces to: *if* plasma economics fully normalise and the HAE prophy / late-stage pipeline (ANDEMBRY plus the broader portfolio) delivers, the -1σ discount is the entry point; the rating mechanically re-rates back toward the 10-yr-average PE-Rel and the target catches up to spot.

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### 4. So — premium or discount?

Two distinct framings, both true:

- **Versus its domestic Australian benchmark (ASX100 ex-resources/financials/REITs)**: CSL retains a structural **PE premium** anchored by 17–18% ROE, low-teens EPS compounding, plasma franchise moat, and a global biotech R&D footprint — but the *size* of that premium has compressed to ~1 std below its 10-year average [1].
- **Versus its own history**: CSL is trading at a clear **discount** — CLSA's target multiple sits at -1σ on PE-Rel, which is the conservative end of the historical range [1].

The catalyst path to closing that discount, per CLSA, is execution on the HAE prophylaxis ramp (ANDEMBRY + Haegarda compounding at +10.2% CAGR through FY29) and Behring gross-margin recovery (+38bps by FY29CL) [5] — not multiple expansion above the historical mean.

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### Caveats / what CLSA's archive does NOT contain on this question
- No explicit global plasma-peer (Grifols / Takeda / Octapharma) PE/EV-EBITDA comp table within the CSL-tagged set inspected.
- No cross-sector global biotech comp (Roche, AbbVie, Novartis) inside this CLSA note.
- Coverage stale relative to today (2026-05-31) — vintage 17 Jun 2025. Spot vs target gap, ROE realisation, and the actual delivery on the ANDEMBRY ramp would need to be re-checked against more recent prints (not in archive).

---

**Sources**
[1] CSL — O-PF (ANDEMBRY approval), Valuation details paragraph — CLSA (17 Jun 2025) — 607962154LinqAlpha.PDF
[2] CSL — O-PF (ANDEMBRY approval), Recommendation history table (Zhijie Zhao, O-PF, TP 5,800.00, 12 Mar 2025) — CLSA — 607962154LinqAlpha.PDF
[3] CSL — O-PF (ANDEMBRY approval), 12M price target A$330.00 / +38% potential — CLSA (17 Jun 2025) — 607962154LinqAlpha.PDF
[4] CSL — O-PF (ANDEMBRY approval), Financial summary table FY23A–FY27CL — CLSA (17 Jun 2025) — 607962154LinqAlpha.PDF
[5] CSL — O-PF (ANDEMBRY approval), ANDEMBRY approval / HAE prophy CAGR section — CLSA (17 Jun 2025) — 607962154LinqAlpha.PDF
[6] CSL — O-PF (ANDEMBRY approval), Investment risks paragraph — CLSA (17 Jun 2025) — 607962154LinqAlpha.PDF

