CSL 0.32% $269.02 csl limited

CSL Bleeds some more

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    lightbulb Created with Sketch. 26
    This from todays AFR also

    Earnings fears batter CSL 13/06/02

    AFR News - 13.06.02 03:32

    Martin Pretty

    CSL shares slid to another two-year low yesterday as fresh concerns about health-care and biotech earnings were triggered by a spate of bad news in the sector from the US.

    US health and pharmaceutical company Abbot Laboratories said its earnings would be curtailed by greater clinical testing expenses, market disruption and unfavourable foreign exchange rates, sending its shares sliding 16 per cent.

    At the same time, shares in drug giant Merck & Co fell 4.5 per cent after it said the introduction of its Arcoxia painkiller would be delayed in the US.

    The two pieces of news damaged the already fragile sentiment in the health sector, aggravating CSL's fall from favour this year.

    In the past two days alone, $650 million has been wiped off its value.

    Its shares slid to $31.40 at yesterday's close from $35.49 at the end of last week.

    The stock had plunged 10 per cent on Tuesday after the company's house broker, Merrill Lynch, downgraded its profit forecasts for the blood products group and lowered its recommendation from "buy" to "neutral".

    Merrill Lynch analyst Michael Carmody warned yesterday that CSL faced fierce competition and aggressive discounting in the US for its intravenous immune globulin (IVIG) products.

    The analyst cut his IVIG sale price estimate and reined in his profit forecasts to match other analysts.

    This is not the first time analysts have raised short-term IVIG pricing concerns, but because Merrill Lynch's investment banking arm has a close relationship with CSL, there was a perception in the market that the firm's research on CSL carried greater weight.

    "The three reasons for pricing pressure are that Alpha Pharmaceuticals is back in the marketplace, that there is a shortage of new research pointing to new applications for IVIG, and that doctors have rationed supplies after a two-year shortage," Salomon Smith Barney analyst Andrew Goodsall told The Australian Financial Review.

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Mkt cap ! $129.5B
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$273.04 $273.04 $268.07 $141.0M 520.5K

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No. Vol. Price($)
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$269.31 126 1
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