ASX-listed CSL Ltd.’s (AU:CSL) share price experienced a sharp decline of 7% yesterday after it lowered its profit forecast for the full year 2023. Analysts expressed mixed opinions on the update overall, maintaining a bullish approach to the stock. The stock has been trading up by almost 20% in the last year.
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CSL is a global healthcare enterprise and ranks among the largest in the world. The company generates a substantial portion of its profits from operations in the United States and reports its financial results in US dollars.
The update is mainly due to the effect of foreign currency fluctuations on the company’s profit. The company now foresees a foreign currency headwind ranging from $230 million to $250 million, surpassing the initial estimate of $175 million reported earlier. Nonetheless, the company’s earnings are still expected to grow at double-digit rates.
Analysts’ Opinion
According to RBC Capital, the share movement is expected to be adversely affected by the profit guidance figures as they fall short of analyst estimates. The company expects its profit guidance for fiscal year 2024 to be between $2.9 billion and $3 billion. This figure falls below the consensus expectations of $3.5 billion and significantly below RBC’s forecast of $3.8 billion.
On the other side, Morgan Stanley is bullish on the numbers, and analyst Sean Laaman reiterated his Buy rating on the stock yesterday. He predicts a growth of 13% in the share price from the current level.
Chris Cooper from Goldman Sachs also confirmed his Hold rating on the stock yesterday. His price target of AU$295.0 suggests a change of just 2.6%.
What is the Price Target for CSL Share?
According to TipRanks’ rating consensus, CSL stock has a Strong Buy rating based on six Buy and one Hold recommendations.
The average target price is AU$339.88, which shows a growth of 18.2% on the current price level.
Conclusion
In the short term, the adverse currency movements may impact the company’s profits. However, long-term shareholders can find reassurance in the company’s projection of another double-digit rise in underlying profit.
