Historic decline in Bayer shares persists, potentially leading to further plummets
Bayer, the German pharmaceutical and life sciences company, has been experiencing a significant downturn in its stock performance. This historic decline, which has reached levels not seen since 2005, can be attributed primarily to litigation costs, particularly those related to glyphosate lawsuits, and restructuring expenses that have impacted net income, despite modest sales growth [1].
In the second quarter of 2025, Bayer reported a mere 0.9% sales growth to €10.7 billion but posted a negative net income of €199 million, largely due to restructuring charges and litigation provisions totalling €7.4 billion [1].
Despite these challenges, Bayer is not resting on its laurels. The company is embarking on a strategic turnaround, aiming to cut costs through a planned reduction of 12,000 jobs and efforts to save €2 billion annually by 2026. This restructuring has already boosted Crop Science's EBITDA by 32.3%, although Pharmaceuticals’ EBITDA fell by 17.2% [1].
Bayer has upgraded its 2025 sales guidance to €46–48 billion and targets €9.7–10.2 billion EBITDA in 2026, suggesting a potential 30% upside in valuation if it successfully reduces debt and meets innovation milestones in products like Nubeqa and Kerendia [1].
However, the stock market has shown mixed reactions to these positive outlook signals. Bayer's stock experienced a 10% drop in early August 2025 after the Q2 earnings release, indicating market skepticism or short-term profit-taking even amid improved financial outlooks [2].
As for potential support levels, while specific price support points are not explicitly given, the current market reaction implies strong volatility. Investors are likely to closely monitor Bayer’s ability to manage litigation risks and execute cost reductions as key factors that could stabilize or improve the stock price in the near term.
In conclusion, Bayer’s stock is currently undergoing a critical transformation phase. Burdened by negative news surrounding the glyphosate issue, the company is navigating through a period of challenges, but with strategic initiatives in place, there is potential for positive medium-term prospects.
In light of the company's strategic initiatives, Bayer intends to invest heavily in cutting costs and saving €2 billion annually by 2026, turning its focus towards financial improvement. However, the stock market's response to these initiatives has been mixed, with investors keeping a close eye on Bayer's ability to manage litigation risks and execute cost reductions for possible stock price recovery.
