Owners of CSL Ltd (ASX: CSL) shares own a piece of Australia's biggest ASX healthcare share. It's one of the larger global biotechnology businesses, and it plans to become much bigger.
The company has already done well for investors, rising by around 330% over the past decade — plus all of the dividend payments.
If profit rises, the CSL share price could rise in the future. Investors usually value a company based on its current and expected profit.
We're going to look at what profit the broker UBS projects the ASX biotech giant to make in the next few years, starting with FY24.
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FY24 reporting soon
We have now entered the August reporting season, during which investors will be able to analyse the performance of various businesses.
CSL plans to report its result just over a week away on 13 August.
For the 2024 financial year, the ASX healthcare share is expected to report it made US$14.7 billion of revenue, US$4.31 billion of earnings before interest and tax (EBIT) and net profit after tax (NPAT) of US$2.99 billion. The company is projected to generate US$6.18 of earnings per share (EPS) and pay an annual dividend per share of US$2.60.
Each of the above numbers would represent an increase of around 10%, with UBS expecting net profit growth of 14%. If CSL can follow this growth up with more profit increases, this could be good news for the share price.
Next, FY25
UBS expects the company to continue growing in FY25 as it recovers from the headwinds of COVID-19.
According to the broker, CSL could generate US$15.7 billion in revenue and US$3.49 billion in net profit in the 2025 financial year. That profit figure would represent a forecast rise of 16.7% year over year.
UBS recently said in a note that collection costs in the plasma space fell during the three months to 31 March 2024, "lending some confidence in the Behring gross margin recovery trajectory through FY25".
The broker is also "incrementally more confident" about the mid-term sales growth outlook for CSL's vaccines.
FY26 projection
UBS has suggested that the financial growth for CSL can continue into FY26.
The broker has projected that CSL's revenue could rise to US$17 billion. This could enable the ASX healthcare share to generate US$4.1 billion of NPAT. Reaching this level of profit in the 2026 financial year would result in the company seeing net profit growth of 18.4% year over year.
And finally, FY27
The 2027 financial year is predicted to be the best year of all, according to UBS.
In FY27, CSL could see US$18.7 billion of revenue, US$6.5 billion of EBIT and US$4.88 billion of NPAT. That profit number would translate into 18.1% year-over-year growth.
If CSL can make that amount of profit, it would equate to an EPS of US$10.08, which could fund an annual dividend per share of US$3.46.
At the current CSL share price, that means it's trading at 20x FY27's estimated earnings. If profit were to keep rising at a double-digit rate after that, then the CSL share price could be an appealing valuation.
