Grifols (CSL's competitor) expected plasma collections (impacted by covid-19) to decline by circa -10% for 2020. This has now further decreased to -15% for the year.

Morgan Stanley notes if these estimates are used for CSL, it would result in the December quarter being down -20% rather than flat as expected. Also, CSL's inventory buffer may not be enough to support the entire FY22. The calculations also suggest material industry-wide immunoglobulin shortages will likely persist for a longer time than originally anticipated.

On the bright side, the fact that Grifols plans on increasing plasma centres to 435 by 2035 from 295 in 2019 gives the broker confidence in the long term strength of the market.

Equal-weight rating with a target price of $282. Industry view: In-line.

Sector: Pharmaceuticals, Biotechnology & Life Sciences.

Target price is $282.00.Current Price is $296.34. Difference: ($14.34) - (brackets indicate current price is over target). If CSL meets the Morgan Stanley target it will return approximately -5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2020 Acquisdata Pty Ltd., source FN Arena