BAYN GR

Bayer AG

Industrial/Transportation


Presented:08/22/2024
Price:€27.71
Cap:$30.32B
Current Price:€26.53
Cap:$29.03B

Presented

Date08/22/2024
Price€27.71
Market Cap$30.32B
Ent Value$76.59B
P/E RatioN/A
Book Value€36.33
Div Yield0.4%
Shares O/S982.42M
Ave Daily Vol3,131,072
Short IntN/A

Current

Price€26.53
Market Cap$29.03B
Bayer AG engages in the business of life science fields of healthcare and nutrition. It operates through the following segments: Crop Science, Pharmaceuticals, and Consumer Health. The Crop Science segment includes developing, producing, and marketing products in seeds and plant traits, crop protection, digital solutions, and customer services to promote sustainable agriculture. The Pharmaceuticals segment is involved in prescription products especially for cardiology and women’s health; specialty therapeutics in the areas of oncology, hematology, ophthalmology, and cell and gene therapy; diagnostic imaging equipment; and necessary contrast agents. The Consumer Health segment focuses on non-prescription products in the dermatology, nutritional supplements, digestive health, allergy, cough and cold, and pain and cardiovascular risk prevention categories. The company was founded by Friedrich Bayer and Johann Friedrich Westkott on August 1, 1863 and is headquartered in Leverkusen, Germany.

Publicly traded companies mentioned herein: Bayer AG (BAYN GR)

Highlights

The presenter is long shares of Bayer AG (BAYN GR), which generated €47B of revenue and €11.7B of EBITDA in 2023 through its three segments: Crop Sciences (€23B revenue, €5.1B EBITDA), Pharmaceuticals (€18B revenue, €5.2B EBITDA), Consumer Health (i.e., OTC drugs; €6B revenue, €1.4B EBITDA). The Crop Sciences segment has massive litigation risk stemming from its weed killing product Roundup that gave consumers cancer, and the Pharmaceuticals segment’s pipeline was hampered late last year after its €5B experimental anticoagulant asundexian was rejected in Phase 3 trials. However, he thinks the litigation risk is overblown at this point and sees the Pharmaceuticals business stabilizing. This creates a path to €4B – €5B of FCF (ex-litigation payments), making the current €27B market cap appear undervalued. As the company continues deleveraging, he expects the stock to trade up from €27 per share to €50+ over the next two years.

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Idea Discussion

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