One of the best things to see from a good company is rising net profit. That's usually what sends share prices higher over time and also helps fund larger dividend payments. Could CSL Ltd (ASX: CSL) shares see significant profit growth in the medium term?
As we can see in the chart above, CSL shares have traded largely sideways over the past five years. In my mind, the rising earnings of the last few years have been catching up with the company's elevated price/earnings (P/E) ratio during that period, so the share price hasn't been able to push higher.
Excitingly, the company is expected to grow profit in each of the coming financial years. Let's look at what's expected of the ASX healthcare share with the help of UBS' profit estimates.
The 2025 financial year is the current financial year, and we're already halfway through it!
UBS believes the CSL shares story is "heavily focused on gross profit margin improvement" at Behring. According to CSL, that division develops and delivers "high-quality medicines that treat people with rare and serious diseases." This includes a range of recombinant and plasma-derived products for treating bleeding disorders, immune deficiencies, and other diseases.
The guided time window for the gross profit margin is between FY26 to FY28 to get back to pre-COVID levels of approximately 57%. The biggest improvement is expected in FY26, with a forecast rise of 200 basis points (2.00%), according to the broker.
UBS also noted that flat flu vaccine sales were expected in FY25, with other major manufacturers pointing to slow sales. US uptake has not returned to pre-COVID levels, and the weather is "warmer than usual in many parts of North America". UBS noted data that suggested the US retail channel saw 4% overall "market shrinkage" with CSL "looking worse".
The broker noted that CSL has already flagged lower orders from major retailers, so UBS believes the headwinds should not surprise investors.
However, UBS remains "optimistic about future recovery" although it's keeping in mind the "possibility of a less vaccine-friendly US administration."
Looking at the broker's forecast for FY25, UBS suggests CSL could generate US$16 billion of revenue and make a net profit of US$3.3 billion.
Bearing in mind the comments above about expected profit margin improvement in the 2026 financial year, this year's net profit could significantly improve, which will help support CSL shares.
UBS forecasts CSL could generate US$17.1 billion of revenue in the 2026 financial year and make US$3.8 billion of net profit (up 16% year over year).
According to UBS, the 2027 financial year could be another solid period with growth expected for the ASX healthcare share.
Revenue could rise to US$18.6 billion in FY27, helping net profit jump 18.5% to US$4.55 billion.
UBS is predicting ongoing double-digit profit growth for the biotech company to the end of the decade.
If the broker's projections come true, then in FY28, the business could make US$20 billion of revenue and US$5.2 billion of net profit, representing a 14.2% year-over-year increase.
The last year of this series of projections is the 2029 financial year. It could cap off an excellent period of growth for the company if UBS is right. In FY29, CSL is projected to generate US$21.6 billion of revenue and make US$5.8 billion of net profit.
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