CSL.ASX reported FY16 revenue of $6.1b on EBITDA of $1.65b. The $500m share buyback is less than conducted in the previous 2 years but will still provide marginal buy side support to underpin the stock. In FY17 we see revenue growing to $6.5b and EBIT in the range of $1.8b suggesting the underlying business can continue to grow at around 12%. This places CSL.ASX on a 12 month forward PE of 27x with a yield of 1.4% assuming dividends per share of $1.30.
An okay result and a stable outlook underpins CSL as a buy write . We own it at lower levels in the model and generated significant call premium earlier in the year when selling December call options.
Author: Leon Hinde
Leon has been working in the financial services industry for 18 years in management and advisory roles. Leon has extensive experience in general advice and dealings involving securities and derivative financial products.
PS 146 Securities & Derivatives, ADA 1 & 2 accreditation, Responsible Manager Certificate. Leon is authorised to provide financial product advice and deal with respect to the following financial products:
· Deposit Products
· Interest in managed investment schemes; and
· Government debentures, bonds and stocks