CSL Ltd: Risk Reward Update

Research evidence excerpt

CSL Ltd: Risk Reward Update

UpdateM

RiskRisk RewardReward– CSL Ltd- CSL(CSL.AX)Ltd (CSL.AX)

Weaker near-term trends but valuation appeal

PRICE TARGET A$166.00 OVERWEIGHT THESIS

Discounted cash flow, probability-weighted 60% base, 10% bull, 30% bear. Skew reflects ▪Although growth expectations for FY26

weaker Ig and albumin growth in FY26, delays in gross margin recovery for CSL Behring, as have been tempered, we remain

well as ongoing headwinds for Seqirus and the downside risks highlighted within updated constructive in relation to the medium- to

FY26 guidance. Key DCF assumptions: WACC 9.2%, terminal growth rate of 3.0%. AUD:USD longer-term outlook for Ig.

at 0.72. ▪In addition, we see potential for yield

initiatives (including Horizon 2) to support a A$155.55

gross margin recovery for CSL Behring.

Consensus Price Target Distribution A$100.04 A$208.08 proposed demerger of Seqirus will be MS PT ▪The

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates delayed until vaccine market conditions

improve.

▪We have reduced our price target but still

see the risk/reward outlook as favourable at

RISK REWARD CHART AND OPTIONS IMPLIED PROBABILITIES (12M) current levels.

AUD Consensus Rating Distribution

A$230.00(+134.79%)A$230.00A$230.00(+134.79%)(+134.79%) ProbProbProb (>230.00)~0.0%(>230.00)~0.0%(>230.00)~0.0% 44% Overweight

240 56% Equal-weight

0% Underweight

MS Rating 180 A$166.00(+69.46%)A$166.00A$166.00(+69.46%)(+69.46%)

ProbProbProb (>166.00)~2.3%(>166.00)~2.3%(>166.00)~2.3% Source: Refinitiv, Morgan Stanley Research

A$97.96A$97.96A$97.96 Risk Reward Themes

Secular Growth: Positive

60 A$90.00(-8.13%)A$90.00A$90.00(-8.13%)(-8.13%) ProbProbProb (<90.00)~41.2%(<90.00)~41.2%(<90.00)~41.2%

View descriptions of Risk Rewards Themes here