CSL
CSL has been stuck in a trading range of about $260 - $320 for at least 3 years. Is it time to reclassify CSL away from being a growth stock?
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Answer
Hi Angus,
An interesting and well founded question. When MM sold CSL back in 2023 we were literally inundated with negative comments around how could any fund manager not own this great Australian business etc. however as you rightly point out its traded sideways for around four years although it has been a wide ~30% trading range.
You’re point is a great one, as things change in markets and as companies get bigger, they can find it harder to grow. The below charts looks at Earnings Expectations (consensus) over time for both FY25 EPS (Blue) and FY26 EPS (orange). You clearly see that earnings are being revised down, not up and share prices ultimately follow earnings. We broad this up in an investment meeting this week, and struggle to identify the catalyst for a resumption of growth in the near term.
- We are neutral on the stock, and considering cutting our position, which has traded back to $277, which was our buy price in April.
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CSL EPS Estimates FY25 & FY26 – Source Bloomberg
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CSL EPS Estimates FY25 & FY26 – Source Bloomberg
