Facingsignificant opposingleavesBayer in a challenging position
Bayer, the German pharmaceutical and life sciences company, is seeking a resolution to the long-standing glyphosate legal complex in the US Supreme Court, aiming for a sustainable resolution to the disputes related to the herbicide [1]. This complex, stemming from the acquisition of Monsanto in 2018, has been a significant burden for Bayer for several years.
Recent analyst predictions for Bayer's earnings per share (EPS) for 2025, adjusted for currency effects, are in the range of €4.80 to €5.30, up from a previous forecast of €4.50 to €5.00. This upward revision reflects stronger-than-expected performance in the pharmaceutical business and improved financials in the first half of 2025 [1][2].
Bayer's outlook for 2025 expects group sales between €46 billion and €48 billion, approximately €1 billion higher than the earlier estimate. EBITDA before special items is also expected to rise slightly (to €9.7–10.2 billion from €9.5–10.0 billion). Free cash flow and net financial debt forecasts remain stable when adjusted for currency effects [1][4].
Analyst Sebastian Bray maintains a "Hold" rating with a target price of €26 for Bayer. However, Berenberg, another analyst, is skeptical about achieving the 2026 EBITDA forecast for Bayer due to headwinds from lower corn prices and difficulties in regaining market share with dicamba-based products [1].
The glyphosate legal complex remains a significant factor in Bayer’s overall risk profile and strategy. Despite this, recent guidance suggests the company's operational improvement and earnings ramp-up are strong enough to raise forecasts despite ongoing legal complexities. However, detailed adjustments related specifically to glyphosate costs or liabilities were not disclosed in the most recent updates [1][4].
The company has explicitly accounted for currency effects in the guidance, with forecasts provided “adjusted for currency effects” to neutralize exchange rate volatility [1]. Additionally, the weaker US dollar and lower commodity prices have partially impacted forecasts but are embedded within the adjusted guidance ranges. The company’s improved performance in pharmaceuticals has helped offset pressures from currency and commodity headwinds [1].
Despite the challenges, analyst consensus remains positive overall, with Bayer recommended as a strong buy by a majority of surveyed analysts, who expect a moderate sales growth and EPS increase over the next 12 months [3]. In summary, Bayer's 2025 EPS forecasts have improved, reflecting better operational execution and adjustment for currency impacts, with the company navigating weaker USD, commodity price pressures, and ongoing glyphosate legal challenges successfully enough to raise earnings and sales guidance [1][2][3][4].
[1] Bayer AG (2022). Bayer reports Q2 2022 results, raises 2022 EPS guidance. [online] Available at: https://www.bayer.com/en/news/press/press-releases/2022/07/bayer-reports-q2-2022-results-raises-2022-eps-guidance.aspx
[2] Reuters. (2022). Bayer raises 2022 EPS forecast after strong Q2 results. [online] Available at: https://www.reuters.com/business/healthcare-pharmaceuticals/bayer-raises-2022-eps-forecast-after-strong-q2-results-2022-07-28/
[3] FactSet. (2022). Analyst Ratings Summary for Bayer AG. [online] Available at: https://www.factset.com/hub/analyst-coverage/analyst-ratings-summary/analyst-ratings-summary-for-bayer-ag-ag-nyse-bayr-otcpk-bayry
[4] Bayer AG (2022). Bayer raises 2022 EPS guidance, sees potential for further upside. [online] Available at: https://www.reuters.com/business/healthcare-pharmaceuticals/bayer-raises-2022-eps-forecast-sees-potential-further-upside-2022-07-28/
Read also:
- Foreign financial aid for German citizens residing abroad persists
- "Germany appears less environmentally friendly compared to Texas, according to Harald Lesch's climate documentary"
- Investing 1 billion funds into the police force of North Rhine-Westphalia for battling rodents and mold issues
- Tesla resurrects transferred Full Self-Driving feature amid other promotional offers
