Bayer (AO) | Buy | Positive SCOTUS Ruling on Roundup - a clear relief for Bayer

Research evidence excerpt

Bayer (AO) | Buy | Positive SCOTUS Ruling on Roundup - a clear relief for Bayer

Bayer Buy | Target Price: EUR49.00

Company description Management

Bayer is the world's largest agrochemicals and seeds player. The inventor of Bill Anderson, CEO

aspirin also has leading positions in pharmaceuticals and consumer health. Wolfgang Nickl, CFO

Bayer in 2018 massively increased its position in agriculture by acquiring Rodrigo Santos, board member

Monsanto, which brought the globally leading seeds business into Bayer. The Key shareholders

acquisition also brought lots of legal problems (glyphosate and PCB litigation), Free float 100.00%

which still to date is burdening Bayer. The pharma pipeline is well-filled with c. Blackrock 10.54%

7bn of expected peak sales. Temasek 3.47% Vanguard 3.38%

Investment case Valuation methodology

Litigation stemming from the Monsanto acquisition (glyphosate, We value Bayer both with a detailed multi-stage discounted

PCBs) is not over yet, but with clearly improving newsflow. cash flow model and with a sum-of-the-parts.

Pharma: while Eylea and Xarelto are faced with patent losses, Despite Bayer having already paid more than USD10bn for the

their respective sales are holding up better than expected so far. glyphosate litigation, we continue to have EUR10bn as future

In November 2023, Bayer stated for the first time publicly that a payouts in our model, which we use as an additional valuation

split-up is an option. cushion.

Catalysts Our TP for Bayer comes from the weighted average of a DCF

Confirmation from Bayer regarding brightening crop market (60%) and an SOP (40%).

outlook. Risks to our rating

Progress on glyphosate litigation. Any new regulatory actions on herbicides (e.g., glyphosate or