A $75 billion collapse: Can CSL shares stage a comeback?

It has been another bruising week for investors in CSL Ltd (ASX: CSL) shares.

The healthcare giant has shed another 8% over the past five trading days. That leaves CSL shares down 34% year to date and a staggering 57% over the past 12 months.

In dollar terms, roughly $75 billion has been wiped from the company's market value compared with this time last year.

So, after one of the biggest share price collapses in CSL's history, is there a path back?

From market darling to market disappointment

For years, CSL shares were the ASX's gold standard.

The company built an enviable track record of growing earnings through its global leadership in plasma therapies and vaccines, rewarding patient shareholders along the way.

Then the wheels came off. A string of earnings downgrades, management changes, and roughly US$5 billion in non-cash impairments linked largely to the CSL Vifor acquisition shattered investor confidence.

The market quickly went from rewarding perfection to punishing every disappointment.

Has the bad news peaked?

The latest setback arrived in May.

Management guided to FY26 revenue of around US$15.2 billion, roughly 4% below consensus expectations, and forecast NPAT of approximately US$3.1 billion, about 7% below analyst estimates.

CSL also flagged another US$5 billion of non-cash impairments across FY26 and FY27.

Since then, however, the story hasn't deteriorated much further. Concerns remain around Tavneos, which faces potential withdrawal in both Europe and the US. Even so, analysts note the product contributes only around 1% of group revenue, limiting the financial impact.

The team at Macquarie Group Ltd (ASX: MQG) believe expectations have now been reset to a relatively low level. The broker forecasts modest earnings growth through FY28 and argues that even small earnings beats could be enough to improve sentiment.

What do brokers think?

Broker optimism on CSL shares isn't what it once was, but neither is it overwhelmingly negative.

UBS recently reiterated its buy rating with a $158 price target, implying around 38% upside from current levels.

The broker expects management to provide cautious FY27 guidance, reflecting ongoing competitive pressures across major plasma markets. However, it also believes recent contract wins could provide some encouragement.

Morgans is also constructive, maintaining a buy recommendation and a $147.59 target price. The broker believes CSL's long-term competitive advantages remain intact but expects investor confidence to recover gradually as the company demonstrates earnings stability.

Some analysts are even more optimistic, with the highest published price target sitting at $198.89, around 74% above the current share price.

Foolish takeaway

CSL remains one of the world's leading biotechnology companies, but rebuilding investor confidence won't happen overnight.

The market wants proof that earnings downgrades are over and that management has regained control of the narrative.

A strong recovery of CSL shares is certainly possible. But while broker targets point to meaningful upside, a return to CSL's record highs is likely to be a marathon rather than a sprint.

The post A $75 billion collapse: Can CSL shares stage a comeback? appeared first on The Motley Fool Australia.

Motley Fool contributor Marc Van Dinther 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 and Macquarie Group. The Motley Fool Australia has recommended CSL and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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