The CSL Ltd (ASX: CSL) share price is down more than 14% after holding its AGM and reducing guidance.
CSL is Australia’s largest biotechnology business, with vaccines and blood plasma being two of its key areas of focus.
CSL share price sinks on FY26 earnings downgrade
The company said that in its vaccine business, it has seen a greater decline in flu vaccination rates in the US than expected.
That’s despite a positive recommendation from the US administration on flu vaccines and an unprecedented level of infection impacting public health.
In the current Northern Hemisphere 2025/2026 season, based on insurance claims data to date, it’s now expecting US vaccination rates to decline by 12% for the overall population and 14% for the 65+ age group, compared to last year.
CSL did note that the 65+ age segment is where its differentiated product continues to grow market share, amid the market downturn.
This challenging environment is impacting CSL’s forecasts, resulting in overall Seqirus revenue for FY26 declining by the mid-teens, compared to the previous outlook of revenue declining by high single digits.
In addition, it has seen the impact of government cost containment measures in China reducing demand for albumin.
It’s revising its FY26 revenue growth outlook to 2% to 3%, down from 4% to 5%. Its underlying net profit (NPATA) growth is now expected to grow by just 4% to 7%, down from the previous guidance of 7% to 10% (at constant currency exchange rates).
FY27 and FY28 guidance reduced too
The company said it anticipates CSL Behring can maintain sustainable and robust growth, with strong group cash generation and balance sheet metrics.
Due to ongoing uncertainty with the US flu vaccine market . While there are scenarios where NPATA growth could “touch double digits”, it thinks high single digit growth is a more appropriate expectation until the US flu vaccine market improves.
Final thoughts on the CSL share price
The company is doing what it can to reduce costs, including reducing R&D fixed costs and enhancing efficiency by reducing its footprint to six sites, bringing the Behring and Vifor commercial and medical teams together to improve productivity and reduce duplication, and it’s reviewing its corporate overheads.
This is a rough period for the company and I’m not sure what a good time to buy is. At some point, I’d expect the business to hit the bottom and then start recovering. But, it’s in a downgrade cycle now, so I’m avoiding investing in the business.
