Bayer Stock Analysis (FY 2020)

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Bayer, the inventor of Aspirin® – one of the world’s most prominent drugs – reported its annual results for 2020. The pandemic and the seemingly never ending story around the Monsanto lawsuit are casting long shadows on the former German pharmaceutical flagship company. Bayer share prices are down by about -50 % compared to their all-time high in 2017. Find out below how the company performed in 2020, which was without a doubt one of the most challenging years since its inception.
Bayer Stock Analysis Header
Bayer AG | Europe | Pharma | Fiscal Year 2020 | ISIN: DE000BAY0017

Table of Contents

Qualitative Analysis

Bayer Company History

Friedrich Bayer
Illustration 1: Friedrich Bayer (Source: Bayer AG)
Founded in 1868 by Friedrich Bayer in the small town of Wuppertal in Germany, Bayer soon evolved to become one of the largest pharmaceutical and chemical companies in the world. By 1899, Bayer had developed its blockbuster drug Aspirin® and sold it successfully across the world. One of the lesser known facts is that Bayer was also one of the first companies to sell a pain relief drug – “Heroin”. At this point in time, little was known about the devastating side effects of the drug. In 1931, Bayer stopped the production of Heroin as political pressure increased. Due to its role as one of Germany’s key industrial companies during WW II, the company faced a lot of criticism in the immediate aftermath of the war.
Today, the company has left its past behind and Bayer has emerged to one of the worlds largest and most recognised players within its industry. In 2020, the company had a global workforce of 99.538 employees and generated 41.4 Billion EUR in revenue. Yet, for the first time in more than a decade, Bayer reported an EBIT of -16.2 billion EUR in 2020 (not considering the adjusted EBIT figure). While the core business operations are still showing a solid performance, the main reason for the negative EBIT were provisions of about 10 billion EUR. Bayer was forced to create these provisions as a direct result of the still pending glyphosate trials – following the Monsanto acquisition in 2016.
Prior to the Monsanto deal, Bayer shares traded at about 130 EUR in 2015. Since then, the stock price is in a continuous downward spiral. Following both the Monsanto verdict, which is expected to cost Bayer about 12 billion EUR and the Corona pandemic, the stock price fell to about 40 EUR in October of 2020. Bayer’s CEO Baumann is still convinced that the Monsanto acquisition was a great deal for the company and will soon start to pay off for Bayer. Investors are therefore waiting for Bayer putting an end to the Monsanto litigations and for the acquisition to pay off.
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Bayer Business Model and Outlook

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Bayer SWOT Analysis

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Bayer CEO: Werner Baumann

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Quantitative Analysis

Bayer roovestor company score

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Disclaimer
We assume no liability for the accuracy of the financial data. Sources of the financial data are foremost IR websites of the company subject to the analysis. Additionally we rely on further data and information from Thomson Reuters EIKON. Moreover, unless better data is available, we do our own calculations of available data for KPI determination. Our stock analyses are by no means to be understood as a buy or sell recommendation and do not provide any conclusions regarding the future development of the company (and thus the future price development of the share).