CSL is a stock Australian investors love to love, no surprise really after its stellar performance over the last 15 years, but love is not generally helpful when it comes to investing. The issue with CSL for now, apart from everyone being bullish on the stock, is the guidance they provided for FY24 was a fair bit below the expectations of the market, with margins not recovering as strongly as many thought they would. While we believe that CSL is a quality company, even quality companies go through difficult periods and we simply cannot see CSL ‘recutting’ recently issued guidance at the upcoming FY23 results.
Over the last few months, we’ve been asked on countless occasions about what to do with CSL. We cut the remainder of our position at ~$280 post the mid-June update, having already reduced the position above $300 in April. Our focus now switches to what level we would again look to accumulate this quality Australian company, that we ultimately want to own.
- We remain comfortable as an observer of CSL following its recent poor result but we will consider accumulating into weakness ~$240 i.e. no hurry just yet, the momentum remains on the downside.
MM remains neutral toward CSL around $260
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