(CercleFinance.com) – Bayer is lining up a fourth decline session this Thursday after a difficult start to the week, marked by renewed fears about the group’s pharmaceutical portfolio and the Roundup issue.
The stock is currently down 0.3%, bringing its decline to more than 20% for the week as a whole. At current price levels, it has lost more than 32% this year, the second worst performance of the DAX behind Siemens Energy.
Bayer lost almost 18% in Sunday’s session alone following the abandonment of a phase III clinical trial on its new anticoagulant, asundexian, due to its lack of effectiveness.
This disappointment led Barclays analysts to downgrade their recommendation on the stock, reduced from ‘overweight’ to ‘weight in line’ with a price target reduced from 65 to 40 euros.
Added to this was a late verdict on the famous herbicide marketed by its subsidiary Monsanto, Roundup, which increased the risks for the German group.
‘In the worst case scenario, Bayer could have to pay 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 stock price has fallen 68% from its highest level reached in 2015 and is trading at levels not seen since 2012.
‘Although the current period is difficult for Bayer, the company has shown its capacity to develop over several decades and to create commercial value’, recalls Peter Garnry, at Saxo, while recognizing that this trajectory will require ‘a lot of patience’.
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