Atlas Funds Management chief investment officer Hugh Dive said that after the latest upgrade CSL was trading on around 35 times forward earnings. Mr Dive, who is a major shareholder, cautioned that a lot of the good news was already priced into the stock.
“There are three things to the upgrade: Seqirus is performing well, higher than expected sales of the two specialty plasma products and the phasing of investment in the heart attack clinical trials – so two of three are considered to be high quality components,” he said.
“Of the $US130-odd million upgrade, the market would like to know what is the contribution of new sales revenue versus timing spend on the clinical trials, a cost which is being shifted into 2019.”
CSL has delivered its second profit upgrade this year on improved sales of its hemophilia drugs and a bad northern hemisphere flu season, propelling its share price to a record high and and market capitalisation above that of two of the four big banks.