There are much better ways to invest in cheap healthcare stocks at the moment. Meanwhile, Bayer announced in May that it reached verbal agreements to settle between 50,000 to 85,000 of its pending glyphosate cases for a total of $10 billion. Whether everyone will be on board with the idea, however, is unknown.
While Bayer was clearly struggling in the last few years, I think we can be a little more optimistic and assume growth in the mid-single digits in the years to come. When calculating with 4% growth following fiscal 2024, we get an intrinsic value of €79.89 and when assuming 5% growth instead, the intrinsic value for Bayer is €95.31. https://forex-world.net/brokers/interactive-brokers-vs-colmex-pro-who-is-better-in/ And even when looking at the last five years where Bayer might not have performed at its highest levels, we still see sales increasing with a CAGR of 8.40% since 2018 and core earnings per share increased with a CAGR of 9.12%. One of the major news stories in the last few weeks was the retirement of CEO Werner Baumann.
Analysts Offer Insights on Healthcare Companies: TG Therapeutics (TGTX), Bayer (OtherBAYRY) and United Therapeutics (UTHR)
The almost 160-year-old company clearly made mistakes (especially its role during World War II), but we are nevertheless talking about a great business with an economic moat. Bayer has three solid business segments that are mostly recession-proof and protected by several patents leading to a competitive advantage. And I remain confident that Bayer is a good long-term investment despite the risks surrounding the business right now.
Because Bayer took over the company, they became responsible for the $10 million settlement, some of which is allocated for potential (yet likely) future cases. For 2021, Bayer says they expect to see sales close to those in 2020 (with core earnings down due to diminished currency rates). And not only the pharma segment will contribute to growth in the years to come. It’s been a year and a half to forget for Domino’s Pizza investors. The past three years have been a real roller-coaster ride for Ford investors.
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- When using 5% growth instead of 4%, we get an intrinsic value of €81.00 and in my opinion the fair, intrinsic value for the stock should be somewhere between €70 and €80 right now.
- While the top line could report strong growth, reported earnings per share were once again negative and Bayer had to report a loss of €2.38 per share (due to the above-mentioned provisions).
- Valuation metrics show that Bayer Aktiengesellschaft may be undervalued.
- Shareholder Equity (which is the difference between Total Assets and Total Liabilities) can be found on the Balance Sheet.
There is no immediately available information on the owners of Bayer. The company’s page on the Frankfurt Stock Exchange only listed BlackRock as the shareholder with a 6.5% stake. The company has been involved in numerous lawsuits concerning the health risks of Roundup. According to Bayer, it has settled 108,000 out of 149,000 claims. Bayer et comp, the company manufactured and sold synthetic dyestuffs when the chemical industry was still in its infancy following the discovery of dyes derived from coal tar.
Bayer (BAYRY) Q1 Earnings Beat, Crop Science Sales Decline
For example, a regional bank would be classified in the Finance Sector. Within the Finance Sector, it would fall into the M Industry of Banks & Thrifts. And within the M Industry, it might further be delineated into the X Industry group called Banks Northeast. This allows the investor to be as broad or as specific as they want to be when selecting stocks.
In 2015, 45 years since glyphosate’s discovery, the International Agency for Research on Cancer (IARC) declared it to be a probable carcinogen. The ruling opened doors to a flood of litigation against Monsanto, for which Bayer is now liable. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Bayer’s share price has fallen 47.58% from €98.94 on 7 June 2018, when it completed Monsanto’s acquisition.
Bayer Adjusts 2021 Outlook
Bayer Aktiengesellschaft’s stock was trading at $12.86 at the beginning of the year. Since then, BAYRY stock has increased by 7.7% and is now trading at $13.85. However, whether or not it is a good stock depends on your investment goal, portfolio size, and your risk tolerance. Always carry out your research before making any investment or trading decision.
A company with an ROE of 10%, for example, means it created 10 cents of assets for every $1 of shareholder equity in a given year. Seeing how a company makes use of its equity, and the return generated on it, is an important measure to look at. ROE values, like other values, can vary significantly from one industry to another.
- BAYRY’s stock has gained 13.3% year-to-date and 13% over the past six months to close its last trading session at $15.02.
- The Sales to Assets ratio (or Sales to Total Assets or S/TA for short) shows how much sales are generated from a company’s assets.
- The 1 week price change reflects the collective buying and selling sentiment over the short-term.
- In June, the court decided that Monsanto’s infamous Roundup weed killer does indeed cause non-Hodgkin’s lymphoma.
- And the core EPS is expected to be between €6.40 and €6.60 compared to €6.10 and €6.30 before.
- While a P/B of less than 3 would mean it’s trading at a discount to the market, different industries have different median P/B values.
And while Bayer seems to be supported by two trendlines at this point, which are making a turnaround likely, we can also assume higher stock prices in the years to come as the stock is still deeply undervalued in my opinion. And the chart as well as the fundamentals of Bayer should make us rather bullish. During the second quarter, Bayer added additional €3.5 billion in provisions established for glyphosate litigations. This is increasing the total provisions to more than €13 billion, but at this point we still don’t know if the amount is enough to settle all claims and pay all fines. Other information on the list included the people’s phone numbers, addresses and, reportedly, their leisure pursuits. This is likely illegal under European data protection law, and Bayer ended up suspending its work with the agency and apologizing for the list’s creation.
This will lead to an increased demand for pharmaceuticals in the coming decades. In 2023, patent losses will only occur in Canada (responsible for 4% of sales) and Australia, but in 2024 and 2025 Bayer will lose patents in key markets probably leading https://trading-market.org/how-to-use-long-and-short-position-drawing-tools/ to steeply declining sales. The stock price of Bayer AG was flying high up until the spring of 2015 when it exceeded €144 a share. In 2016, the company announced its $66 billion acquisition of Monsanto, and it all went downhill from there.