Bayer (BAYRY) AI Stock Analysis

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Bayer

(OTC:BAYRY)

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Neutral 54 (OpenAI - 5.2)

Rating:54Neutral

Price Target:

$14.00

▲(12.90% Upside)

Action:DowngradedDate:01/28/26

The score is held back primarily by weak profitability, leverage, and deteriorating free cash flow, despite stable operating cash generation. Technicals show an uptrend but are overextended, raising pullback risk. Valuation is supported by a very high dividend yield, while the earnings call adds a modest positive from pharma growth and approvals but is offset by debt, negative free cash flow, and litigation/regulatory risks.

Positive Factors

Diversified life‑sciences footprint

Bayer's multi‑segment business model spreads revenue across pharma, consumer health, crop science and animal health, reducing reliance on any single cyclical market. This diversification supports more stable long‑term cash flows and funding for R&D and strategic investments.

Operating cash generation supportive

Despite net losses, Bayer generates positive operating cash flow, indicating core businesses convert earnings into cash. This durable cash generation helps fund operations, R&D and servicing obligations, providing financial flexibility while management addresses profitability and deleveraging.

Pharma product momentum and approvals

Strong double‑digit growth in key drugs and recent FDA approval give Bayer durable revenue uplift and pipeline validation. Successful launches and rising market share suggest sustainable prescription adoption and recurring revenue, supporting medium‑term top‑line and margin improvement.

Negative Factors

High leverage and large net debt

Elevated leverage and sizable gross/net debt limit strategic flexibility and increase refinancing and interest risks. Over time, high debt burdens constrain investment, reduce agility to pursue M&A or buybacks, and heighten vulnerability to cost or revenue shocks, slowing recovery.

Negative and declining free cash flow

Material negative FCF and weakening FCF growth undermine the company's ability to self‑fund R&D, dividends and debt reduction. Persistent cash deficits force reliance on external financing or asset sales, increasing long‑term cost of capital and constraining strategic investment.

Ongoing litigation and regulatory overhangs

Prolonged litigation and regulatory issues create structural revenue and cost uncertainty, potentially leading to settlements, restrictions or lost product licenses. These overhangs can depress investment, limit market access, and impose recurring legal and compliance costs over multiple years.

Bayer (BAYRY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$43.79B

Dividend Yield0.29%

Average Volume (3M)312.21K

Price to Earnings (P/E)―

Beta (1Y)0.49

Revenue Growth-0.40%

EPS Growth66.67%

CountryUS

Employees90,587

SectorHealthcare

Sector Strength45

IndustryDrug Manufacturers - General

Share Statistics

EPS (TTM)0.18

Shares Outstanding3,929,696,000

10 Day Avg. Volume430,131

30 Day Avg. Volume312,210

Financial Highlights & Ratios

PEG Ratio0.56

Price to Book (P/B)0.58

Price to Sales (P/S)0.40

P/FCF Ratio4.03

Enterprise Value/Market Cap1.63

Enterprise Value/Revenue1.56

Enterprise Value/Gross Profit2.76

Enterprise Value/Ebitda11.70

Forecast

1Y Price Target

$12.35

Price Target Upside-0.40% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering2

EPS Forecast (FY)1.37

Revenue Forecast (FY)$53.82B

Bayer Business Overview & Revenue Model

Company DescriptionBayer Aktiengesellschaft, together its subsidiaries, operates as a life science company worldwide. It operates through Pharmaceuticals, Consumer Health, and Crop Science segments. The Pharmaceuticals segment offers prescription products primarily for cardiology and women's health care; specialty therapeutics in the areas of oncology, hematology, and ophthalmology; and diagnostic imaging equipment and contrast agents, as well as cell and gene therapy. The Consumer Health segment markets nonprescription over-the-counter medicines, medical products, medicated skincare products, nutritional supplements, and self-care solutions in dermatology, nutritional supplements, pain and cardiovascular risk prevention, digestive health, allergy, and cold and cough. The Crop Science segment offers chemical and biological crop protection products, improved plant traits, seeds, digital solution, and pest and weed control products, as well as customer service for agriculture. This segment also provides breeding, propagation, and production/processing of seeds, including seed dressing. The company has a collaboration agreement with MD Anderson Cancer Center to develop oncology drugs; research and license agreement with Dewpoint Therapeutics, Inc. for the development of new treatments for cardiovascular and gynecological diseases; collaboration agreement with Exscientia Ltd, Foundation Medicine Inc., and Evotec AG; research collaboration with Arvinas Inc.; strategic research partnership with University of Oxford to develop novel gynecological therapies; and Kyoto University to identify new drugs candidates for the treatment of pulmonary diseases. It distributes its products through wholesalers, pharmacies and pharmacy chains, supermarkets, online and other retailers, and hospitals, as well as directly to farmers. Bayer Aktiengesellschaft was founded in 1863 and is headquartered in Leverkusen, Germany.

How the Company Makes MoneyBayer generates revenue through multiple key streams across its business sectors. In pharmaceuticals, the company earns money from the sale of prescription drugs, including treatments for cardiovascular diseases, oncology, and women's health. The consumer health segment contributes by selling over-the-counter medications and health products. In the crop science division, Bayer profits from the sale of seeds, crop protection products, and digital farming solutions that enhance agricultural productivity. Additionally, Bayer's animal health segment generates revenue through veterinary products and services. The company also engages in strategic partnerships and collaborations, particularly in research and development, enhancing its product pipeline and market reach, which further contributes to its financial performance.

Bayer Key Performance Indicators (KPIs)

Any

EBITDA by Segment

EBITDA by Segment
Reveals the profitability of each business unit before interest, taxes, depreciation, and amortization, indicating which segments drive earnings and operational efficiency.

Chart InsightsBayer's Crop Science segment shows significant volatility, with recent quarters reflecting a downturn, possibly due to market pressures or strategic shifts. Pharmaceutical EBITDA has been relatively stable but shows a slight downward trend, indicating potential challenges in maintaining growth. Consumer Health remains consistent, suggesting resilience in this segment. Without recent earnings call insights, investors should monitor external factors affecting Crop Science and strategic moves in Pharmaceuticals to gauge future performance.

Data provided by:

The Fly

Bayer Earnings Call Summary

Earnings Call Date:Mar 04, 2026

(Q4-2025)

Next Earnings Date:May 12, 2026

Earnings Call Sentiment Neutral

The call balanced clear operational progress—delivery of raised guidance, improved launch momentum in Pharma, meaningful DSO-driven cost savings, and a reduced net financial debt position in 2025—against substantial legal and cashflow headwinds. Management articulated tangible growth drivers across Crop Science, Pharma and Consumer Health and concrete cost-savings milestones, but also disclosed large litigation provisions (EUR 11.8 billion liabilities), expected negative free cash flow in 2026 due to ~EUR 5 billion litigation-related payouts, projected net debt increase and significant product declines (notably Xarelto and Eylea). Given the mix of strong operational execution and material financial/legal risks that will weigh on near-term cash flow and balance-sheet metrics, the tone of the call is cautiously constructive but realistic about the challenges ahead.

Q4-2025 Updates

Positive Updates

Delivered Raised Guidance and Full-Year Results

Currency- and portfolio-adjusted group net sales of EUR 45.5 billion for 2025; group net sales grew ~1% year-over-year on a currency- and portfolio-adjusted basis. Core earnings per share (reported definition) of EUR 4.91 and group EBITDA before special items of EUR 9.7 billion. Free cash flow of EUR 2.1 billion (upper end of guidance).

Improved Balance Sheet Position in 2025

Net financial debt reduced to below EUR 30 billion at end of 2025 (helped by free cash flow and ~EUR 1.4 billion FX tailwind), and core financial result improved due to lower interest expenses and positive equity-result changes.

Dynamic Shared Ownership (DSO) Cost Savings and Productivity Gains

DSO delivered an additional EUR 700 million of cost reductions in 2025; total savings through DSO expected to reach EUR 2 billion by the end of the year. Organizational flattening: roughly half as many layers and management reduced by ~2/3 vs. program start, enabling faster product launches and increased agility.

Crop Science: Licensing Windfall and Strong Seed/Trait Performance

Licensing resolutions with Corteva contributed ~EUR 300 million to Q4 2025 corn performance and ~EUR 450 million expected to support soy in Q1 2026. Corn seeds & traits benefited from historically high North American acreage and strong global performance; core Crop Science growth outlook of 1%–4% in 2026 and expected EBITDA margin (before special items) of 20%–22%.

Robust Pharma Launch Momentum

Launch products (Nubeqa, Kerendia, Beyonttra, Lynkuet) showed strong momentum in 2025. Company expects Nubeqa and Kerendia to grow ~50% in 2026 (constant currency). Pipeline progress included 16 clinical programs advanced and five new approvals/key indications in 2025.

Consumer Health Resilience and Strategic Focus

Consumer Health delivered stable net sales year-over-year in 2025 despite softness in the U.S. and China. 2026 guidance anticipates net sales growth of 0%–4% (currency and portfolio adjusted) and EBITDA margin before special items of 22%–24%, driven by Road to Billion strategy, e-commerce and AI investments.

Operational Transformation Enabling Faster Time-to-Market

DSO and other reorganizations shortened time-to-market for new products (examples: record launch speeds in Pharmaceuticals and <1-year launch cycles cited for some Consumer Health products), supporting faster commercialization of innovations.

Negative Updates

Large Litigation-Related Costs and Provisions

Litigation-related special items of EUR 7.5 billion in 2025; total litigation-related provisions and liabilities assessed at EUR 11.8 billion covering known and reliably forecast costs (including past glyphosate verdicts).

2026 Negative Free Cash Flow and Financing Impact

Outlook for 2026 free cash flow of negative EUR 1.5 billion to negative EUR 2.5 billion driven by an expected litigation-related payout of around EUR 5 billion. Net financial debt projected to increase to EUR 32–33 billion (constant currencies).

Reported Earnings Pressures and One-Offs

Reported earnings per share were negative at minus EUR 3.68 in 2025, driven by amortization of intangibles, significant litigation-related provisions and liabilities classified as special items. Methodology change for core EPS (including certain amortization) causes an approximate EUR 0.35 step-down in the 2025 comparable core EPS (adjusted core EPS ~EUR 4.57).

Foreign Exchange and Geopolitical Headwinds

Material FX headwinds of about EUR 1.7 billion in 2025 (U.S. dollar, Brazilian real and hyperinflation currencies) and an anticipated FX headwind of ~EUR 0.30 to core EPS for 2026. Management highlights continued volatility from tariffs, FX and geopolitics as major swing factors.

Product-Specific Declines and Regulatory Pressure

Expected significant declines for key legacy products: Xarelto decline of roughly 35%–40% in 2026 (generic pressure accelerating); Eylea franchise decline ~20%–25% in 2026 (biosimilar entry); glyphosate sales expected to decrease ~2%–6% year-over-year due to tariff reductions and generic price declines. Crop Science faced regulatory headwinds (dicamba label vacatur, Movento expiration) and EU regulatory pressure impacting protection portfolio.

Consumer Health Market Softness in Key Markets

Consumer Health categories, especially nutritionals and seasonal cough/cold/allergy, were negatively impacted by market softness in the U.S. and China, inventory destocking and weaker seasonality, constraining short-term growth in 2025 and 2026.

Ratings and Funding Uncertainty

Negative outlook remains with rating agencies given litigation-related payout and projected increase in net financial debt; management expects to use debt instruments and equity-credit receiving structures for financing, but 2026 outlook conservatively reflects straight debt, creating short-term rating and funding risk.

Company Guidance

Bayer's 2026 guidance (at constant currencies) targets group net sales of €45–47bn, EBITDA before special items of €9.6–10.1bn (≈ -1% to +4% y/y) and core EPS of €4.30–4.80 (after a 2025 core‑EPS methodology change that adjusts 2025 from €4.91 to €4.57, a ~€0.35 step‑down); the company expects negative free cash flow of about -€1.5bn to -€2.5bn due to an anticipated ~€5bn litigation payout and forecasts net financial debt rising to €32–33bn (from <€30bn at end‑2025), with FX headwinds of ~€0.30 on core EPS. Division-level guidance includes Crop Science core growth of 1–4% c/p‑adj and an EBITDA margin before special items of 20–22% (glyphosate sales -2% to -6%; Corteva‑related licensing supported ~€300m in Q4‑25 and ~€450m in Q1‑26), Pharmaceuticals revenue 0–3% with Nubeqa/Kerendia growth ~50%, Xarelto -35% to -40% and Eylea -20% to -25% and a Pharma margin of 23–25%, and Consumer Health sales 0–4% with a margin of 22–24%. Management also reiterated DSO savings of ~€700m in 2025 and cumulative DSO savings of €2bn by year‑end, reported litigation‑related special items of €7.5bn and litigation provisions/liabilities of €11.8bn, and said financing is planned via senior bonds and instruments that can receive equity credit.

Bayer Financial Statement Overview

Summary

Financial results are mixed: modest revenue growth and a healthy gross margin are offset by negative net profitability, elevated leverage (debt-to-equity 1.34), and declining free cash flow (-19.37%). Operating cash flow remains supportive despite net losses, but overall profitability and balance-sheet risk limit the score.

Income Statement

Neutral

Bayer's income statement shows a mixed performance. The TTM data indicates a slight revenue growth of 2.86%, but the company is struggling with profitability, as evidenced by a negative net profit margin of -0.43%. The gross profit margin remains healthy at 56.35%, suggesting efficient production processes. However, the negative net income and declining EBIT margins highlight ongoing challenges in cost management and operational efficiency.

Balance Sheet

Neutral

The balance sheet reflects a moderate level of financial stability. The debt-to-equity ratio of 1.34 indicates a relatively high leverage, which could pose risks if not managed properly. The return on equity is negative, at -0.64%, reflecting the company's struggles with profitability. However, the equity ratio remains stable, suggesting a balanced asset structure.

Cash Flow

Neutral

Cash flow analysis reveals some concerns but also strengths. The free cash flow growth is negative at -19.37%, indicating potential liquidity issues. However, the operating cash flow to net income ratio is positive, suggesting that the company is generating cash from its operations despite net losses. The free cash flow to net income ratio of 0.59 indicates a reasonable conversion of earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	45.87B	46.61B	47.64B	50.74B	44.08B	41.40B
Gross Profit	25.85B	25.34B	27.89B	30.87B	27.27B	22.26B
EBITDA	6.10B	8.81B	4.21B	10.44B	6.97B	-11.48B
Net Income	-195.78M	-2.55B	-2.94B	4.15B	1.00B	-15.56B
Balance Sheet
Total Assets	122.45B	110.85B	116.26B	124.88B	120.24B	117.05B
Cash, Cash Equivalents and Short-Term Investments	7.24B	8.09B	10.59B	10.15B	7.74B	11.88B
Total Debt	46.57B	40.70B	44.79B	41.65B	39.53B	41.55B
Total Liabilities	87.55B	78.81B	83.18B	85.95B	87.07B	86.35B
Stockholders Equity	34.75B	31.91B	32.93B	38.77B	33.02B	30.52B
Cash Flow
Free Cash Flow	3.70B	4.59B	2.37B	4.14B	2.48B	2.48B
Operating Cash Flow	6.63B	7.37B	5.12B	7.09B	5.09B	4.90B
Investing Cash Flow	-2.29B	164.00M	-4.01B	-2.38B	855.00M	-4.07B
Financing Cash Flow	-2.64B	-7.18B	-679.00M	-4.22B	-5.64B	423.00M

Bayer Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price12.40

Price Trends

50DMA

12.32

Negative

100DMA

10.45

Positive

200DMA

9.15

Positive

Market Momentum

MACD

-0.18

Positive

RSI

30.51

Neutral

STOCH

0.82

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAYRY, the sentiment is Neutral. The current price of 12.4 is below the 20-day moving average (MA) of 13.08, above the 50-day MA of 12.32, and above the 200-day MA of 9.15, indicating a neutral trend. The MACD of -0.18 indicates Positive momentum. The RSI at 30.51 is Neutral, neither overbought nor oversold. The STOCH value of 0.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BAYRY.

Bayer Peers Comparison

Overall Rating

UnderperformOutperform

Sector (51)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GILD	74 Outperform	$183.52B	21.80	40.49%	2.52%	2.76%	6407.19%
BMY	71 Outperform	$124.67B	17.70	40.53%	4.84%	1.26%	―
SNY	69 Neutral	$112.55B	19.32	6.76%	4.58%	-9.32%	120.62%
GSK	67 Neutral	$113.85B	15.35	38.48%	3.41%	5.97%	128.66%
PFE	64 Neutral	$151.14B	19.60	8.87%	6.65%	4.44%	128.96%
BAYRY	54 Neutral	$43.79B	-127.71	-0.99%	0.29%	-0.40%	66.67%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

* Healthcare Sector Average

Performance Comparison

BAYRY

Bayer

11.09

4.52

68.80%

BMY

Bristol-Myers Squibb

61.22

4.28

7.52%

GILD

Gilead Sciences

147.83

35.53

31.64%

GSK

GlaxoSmithKline

57.07

19.75

52.90%

PFE

Pfizer

26.58

2.40

9.91%

SNY

Sanofi

46.47

-10.85

-18.93%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jan 28, 2026