Forum Topics CSL CSL Morgan Stanley’s View

Pinned straw:

Last edited one year ago

Morgan Stanley’s top healthcare picks for ASX reporting season - TradingView. Com, 11th July 2023.

“Morgan Stanley says the recovery of healthcare earnings to pre-pandemic levels is more challenging than expected. Analysts favour companies that have recently provided guidance on upcoming earnings. 

“For most stocks, volume recovery to pre-pandemic levels has been sluggish accompanied by higher cost inflation, yet P/E multiples across the sector are generally inflated,” Morgan Stanley analysts said in a note on Tuesday.

“Staffing shortages have been a major detractor from volume recovery which could be more structural than transient (eg. nurses).”

Heading into August reporting season, the investment bank favours CSL (ASX: CSL) – which recently reset its FY24 expectations – as well as Sonic Healthcare (ASX: SHL) – where volume growth is robust and cost inflation has been contained.

Most preferred large caps: CSL, Ebos and Sonic Healthcare

CSL provided a market update on 14 June, which triggered a sharp 6.9% selloff. The update reaffirmed an FY23 net profit guidance of US$2.7 billion to US$2.8 billion and a first-time FY24 guidance of US$2.88 billion to US$3.01 billion, which missed analyst expectations. The stock has fallen a further 14% since the update and trading at levels not seen since July 2022. Morgan Stanley’s Overweight thesis is based on key points including:

  • “Industry data suggest that the trajectory of plasma recovery is accelerating.”
  • “CSL's plasma collections are now above pre-pandemic levels with positive momentum.”
  • “We don’t see change to the long-term picture despite the downgrade to our forecasts following the market update, but rather a 6-12 month delay in getting there.”

Morgan Stanley is “Overweight” on CSL with a share price target of $325.”

Held: IRL 9.4%, SM 19%

Solvetheriddle
Added one year ago

@rick who is the analyst Sean Laaman? thnaks

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