Bayer: fourth downturn, towards a dark week for the stock

(CercleFinance.com) - Bayer's share price fell for the fourth time on Thursday, after a difficult start to the week, marked by renewed fears about the company's pharmaceutical portfolio and the Roundup issue.


The share price is currently down 0.3%, bringing its decline for the week as a whole to over 20%. At current price levels, it has lost more than 32% this year, the second-worst performance on the DAX behind Siemens Energy.

Bayer's share price fell by almost 18% in Sunday's trading session alone, after a Phase III clinical trial of its new anticoagulant, asundexian, was abandoned due to lack of efficacy.

This disappointment led analysts at Barclays to downgrade their recommendation on the stock from 'overweight' to 'weight in line', with a price target reduced from ?65 to ?40.

Added to this was a late verdict on the famous herbicide marketed by its Monsanto subsidiary, Roundup, which increased the risks for the German group.

In the worst-case scenario, Bayer could have to pay out more in litigation than the $16 billion it already has on its balance sheet", warns Peter Garnry, head of equity strategy at Saxo Bank.

For the strategist, "everything that could go wrong has gone wrong for Bayer, reducing expectations to a very low level".

As a result of all these concerns, Bayer's share price has plummeted 68% from its 2015 high and is trading at levels not seen since 2012.

'Although these are challenging times for Bayer, the company has demonstrated its ability to grow over several decades and create business value', reminds Saxo's Peter Garnry, while acknowledging that this trajectory will require 'a lot of patience'.

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