CSL shares trade at just 12 times forecast earnings. Here’s why they could be the buy of the decade

CSL Ltd (ASX: CSL) has crashed 60% from its all-time high. It now trades at just 12 times forecast FY2026 earnings.

That is a multiple more commonly associated with slow-growth industrial companies than with the world’s second-largest plasma-derived therapies business.

For long-term investors looking to buy quality businesses at basement prices, this could be the opportunity of the decade.

Why CSL shares crashed

The selling has been brutal and perhaps partially overdone.

Three forces converged on CSL shares in 2025 and 2026.

First, the broader ASX healthcare sector was sold aggressively as investors rotated into resources and energy stocks during the Middle East conflict.

Second, CSL delivered a series of earnings downgrades as plasma collection volumes normalised more slowly than expected following the COVID-19 disruption, and China albumin pricing weakened.

Third, the appointment of interim CEO Gordon Naylor following Paul McKenzie’s departure created leadership uncertainty at perhaps the wrong moment.

Management cited weakness in China albumin pricing, with revenue down $200 million from market value decline.

What’s more, US immunoglobulin inventory normalisation is expected to have a $300 million impact as the primary revenue headwinds.
The company  also flagged approximately US$5 billion in additional non-cash pre-tax impairments to be recognised across FY2026 and FY2027, largely relating to the CSL Vifor acquisition.

Interim CEO Gordon Naylor said:

Our growth initiatives are working, but the financial benefits will take longer than previously anticipated to materialise.

The sell-off was so severe that insiders began buying CSL shares on market in May 2026, with interim CEO Gordon Naylor purchasing 1,100 shares as a direct signal of his confidence in the business at current prices.

The sell-off looks overdone

CSL is the world’s second-largest plasma-derived therapies company, with an irreplaceable position in a market that has taken decades to build.

The barriers to entry in plasma collection, fractionation, and biopharmaceutical manufacturing are among the highest of any industry.

No competitor has meaningfully eroded CSL’s market position in the past 30 years.

The issues that drove the earnings downgrades, (plasma collection normalisation and China pricing) are both temporary.

Furthermore, the gross profit margin at CSL Behring, the core plasma business, is on a clear recovery path. UBS expects the margin to recover toward pre-COVID levels of approximately 57% by FY2028, with the biggest improvement occurring in FY2026.

That margin recovery, combined with volume growth as plasma collection catches up, has created an earnings recovery trajectory over the next two to three years.

What the brokers are saying about CSL shares

The broker community has remained largely constructive through the selloff.

Morgans carries a buy rating on CSL shares with a price target of $293.83, noting the restructuring augments rather than masks the underlying business. The broker added that streamlining operations and cost savings could support double-digit earnings growth over the medium term.

Macquarie retained its outperform rating on CSL shares following the most recent guidance update.

On the more cautious side, Sanlam Private Wealth holds a hold rating. The broker noted that while CSL appears good value over the longer term, other stocks could potentially deliver faster returns in the short to medium term.

Foolish takeaway

CSL shares at 12 times forecast earnings is not something that comes along often.

The plasma collection recovery and margin improvement narrative is underway.

Insiders are buying and Morgans sees upside to $293.83.

For patient investors who can look past the near-term noise and focus on where CSL’s earnings will be in three years, the current entry point could prove to be one of the great buying opportunities this stock has ever offered.

The post CSL shares trade at just 12 times forecast earnings. Here’s why they could be the buy of the decade appeared first on The Motley Fool Australia.

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Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.