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Bayer AG ADR BAYRY

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Stewardship

PREMIUM

Bayer Announces Weaker Than Expected Outlook for 2021, Leading to Fair Value Estimate Reduction

Damien Conover, CFA Sector Director

Analyst Note

| Damien Conover, CFA |

Bayer announced 2021 guidance below our expectations, as greater than anticipated coronavirus headwinds are weighing on the crop science business. We are lowering our fair value to EUR 78 ($23 on the ADR) from EUR 85 ($25) based on the lower-than-expected guidance. Despite the challenges, Bayer continues to be well positioned within the healthcare and agriculture markets and we continue to rate the firm with a wide moat rating. While Bayer faces several challenges in the crop science segment, including COVID-19 pressures and a glyphosate litigation overhang, we expect over the long term, the firm will return to stability, boosting the prospects for an improved valuation.

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Company Profile

Business Description

Bayer is a German healthcare and agriculture conglomerate. Healthcare provides just over half of the company's sales and includes pharmaceutical drugs as well as vitamins. The company has a crop science business that includes seeds, pesticides, herbicides, and fungicides, which was expanded through the acquisition of Monsanto.

Contact
Kaiser-Wilhelm-Allee 1
Leverkusen, 51368, Germany
T +49 214301
Sector Healthcare
Industry Drug Manufacturers - General
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 101,168

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