CSL (ASX:CSL) for as long as I can remember, have always traded on a high PE and whatever their share price have looked expensive and given their profit downgrade today, it's not surprising to see their share price off 6.8%. This is what high PE stocks do when they hit earnings/profit speed bumps as some of the future earnings are already baked into the share price. CSL expects a profit hit of US$250m due to an increasing US dollar, with FY23 profit revised down from US$2.8bn to $2.55bn, with FY24 profit in the same boat, revised down some US$500m to US$2.9-3.0bn. We can see cash flow and profitability ratios have come off from FY21 to FY22 due to higher costs of doing business and the COVID kicker to earnings now over. This has hit their F-score 4 and quality number 83 as back in June 2021 they were 8 and 98 respectively and given the profit downgrades I would be expecting the weakness in these figures to continue as cash flow and profitability remain flat. But their performance over the years speaks for itself and they are a highflyer momentum stock, meaning, you have to pay to play and, as I alluded to at the start, they have always looked expensive but have delivered year after year, with this just being an opportunity some of us have been wating for.
Hi Anton, I agree with your comments. I have been a long time investor, sometimes its been a bumpy ride, but always topped up on weakness.
