BAYRY
📉 Bayer’s stock has been declining for years, down 60% in the last three, due to obstacles such as the ongoing glyphosate litigation, setbacks in new drug development, and short-term problems in its crop protection division.
🌾 Despite these challenges, Bayer maintains global leadership in agriculture, both in seeds, herbicides, and its pharmaceutical division manages quite relevant products.
💰 The company’s enterprise value is less than \$60 billion, with a free cash flow yield of 8%, generating \$4 billion annually, and a P/E ratio of 5, suggesting potential upside if the Roundup litigation is resolved favorably and agricultural demand recovers.
@bernardodegarcia:
“Bayer is another German giant focused on crop protection and the pharmaceutical industry. Its stock, as we see, has been falling for years, 60% in the last three, due to several obstacles. First, we have a litigation that is the never-ending story with glyphosate. They have a problem with the herbicide Roundup. They also have setbacks in the development of new drugs and problems in the short term in their crop protection division. In 2018, it paid \$63 billion for Monsanto, and now its market cap is barely 23-24 billion euros. If the Roundup litigation is resolved less costly than feared, and if the recovery in agricultural demand materializes after a somewhat weak 2024, Bayer could rebound strongly. We must also add the possibility of new drug launches, internal restructuring with the new management, and the eventual simplification of its portfolio.”
Watch the exact part of the @bernardodegarcia video where Bayer is discussed here:
View the video on YouTube.
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