CSL has a maintained 12 month stock price target of $36.95 from Australian sharemarket analyst Macquarie Research Equities.

CSL: A Healthy Alternative

US pharmaceutical company, Merck released their 1Q08 results yesterday, which demonstrated an increase in growth for cervical cancer vaccine Gardisil in the US and the UK. According to Macquarie Research Equities (MRE) these results further support CSL’s earnings growth momentum. As most recently illustrated by last week’s Baxter result, the plasma industry profile looks supportive in the short term with strong plasma demand continuing, albeit with some growth in input costs.

CSL: Result

- Revenue was US$629.8m with Merck sales comprising US$390m and Sanofi-MSD sales at US$239.8m;
- The previous quarter decline in US growth can be attributed, in part, to seasonality and also perhaps due to heavy vaccines for children in the earlier part of CY07. European sales, on the other hand, benefited from the Euro’s strength against the $US;
- Other global sales have also benefited from this currency trend, although Australian Gardasil sales making a smaller contribution given CSL’s recent guidance of A$60–70m;

CSL Revision and Recommendation

MRE have upgraded their earnings revisions to 1.6% for FY08, 3.2% for FY09 and 0.9% for FY10 as a result of more aggressive global market penetration by Gardisil. MRE also maintain a 12-month price target of A$36.95 with the underlying catalyst being a faster rollout of higher margin Privigen. In addition to this MRE will be closely monitoring the global demand for immunoglobulins and albumin, and finally looking for a potential offset from further adverse currency movements.