Bayer AG BAYRY

In reaction to a court’s denial for the glyphosate class-action settlement, Bayer is likely moving forward with most elements of the settlement, with exceptions around future cases. With the situation looking fairly similar with or without the class-action approval, we don’t expect any change to our fair value estimate. A challenge in the class action centered on the path forward for future glyphosate claims, but we had viewed these cases with uncertainty even within the class action. As a result of the denial of the class action, we view these future claims with a similar level of uncertainty, which supports our high uncertainty rating for the stock that includes a bear case with significantly higher legal costs. While we expect continued payments beyond the close to $10 billion already established for the majority of the current cases, we believe Bayer remains well positioned to deal with the legal costs while funding the innovation needed to maintain its wide moat.