Analyze the performance of CSL Ltd (CSL.ASX) for the past year ending July 2026, identifying the primary drivers behind its price depreciation and whether it is oversold or not. Based on this analysis, provide a discounted cash flow (DCF) fair value estimate and projected price targets for July 2027, July 2029, and July 2031.
CSL Limited (CSL.ASX) experienced a significant decline in the year ending July 2026, with its share price falling approximately 50% to 57% Verified Answer #1, Verified Answer #2, Verified Answer #3. The stock dropped from levels near A$270 in July 2025 to a range of approximately A$114–A$123 by late July 2026 Verified Answer #1, Verified Answer #3, Verified Answer #4.
The primary drivers of this price depreciation included approximately US$5 billion in non-cash asset impairments, largely tied to the integration of the CSL Vifor acquisition Verified Answer #1, Verified Answer #3, Verified Answer #5. The company also issued multiple earnings downgrades, with FY2026 revenue guidance revised to approximately US$15.2 billion and net profit after tax (NPAT) to roughly US$3.1 billion, both of which trailed market expectations Verified Answer #3, Verified Answer #4, Verified Answer #6. Operational challenges further pressured the stock, including lower U.S. influenza vaccination rates affecting the Seqirus division, inventory normalization in the U.S. immunoglobulin market, and policy-driven declines in China's albumin market Verified Answer #1, Verified Answer #2, Verified Answer #6. Additionally, the sudden departure of CEO Paul McKenzie in early 2026 and the subsequent leadership transition created strategic uncertainty Verified Answer #2, Verified Answer #3, Verified Answer #5.
Technical indicators suggest CSL is currently in oversold territory Verified Answer #2, Verified Answer #6. In mid-2026, the stock's Relative Strength Index (RSI) dropped to approximately 20.98, a level indicating deeply oversold conditions Verified Answer #1, Verified Answer #2, Verified Answer #6.
A discounted cash flow (DCF) analysis, utilizing a base free cash flow of US$3.5 billion, a 9.5% weighted average cost of capital (WACC), and a 2.5% terminal growth rate, estimates the fair value of CSL at approximately A$145 per share Verified Answer #1. Projected price targets for the stock are A$165 for July 2027, A$210 for July 2029, and A$285 for July 2031 Verified Answer #1.