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Stock Watch: Bayer’s Movable Goalposts

Lowered Full-Year Guidance Met After November’s Revision

 
• By Andy Smith

After lowering its full-year earnings guidance just six weeks before the end of 2024, Bayer, by talking up of the prospects for its new drug launches and a major clinical trial result in 2025, might risk damaging its integrity further.

Stock Watch Image, Andy Smith
ANDY SMITH OFFERS A LIFE SCIENCE INVESTOR'S PERSPECTIVE ON BIOPHARMA BUSINESS

Of all the stock price reactions in the fourth-quarter 2024 earnings season, the last – that of Bayer – was the most perplexing. Bayer’s stock price opened up in Frankfurt by 6% and closed the day up by over 4% compared with a gain of just over 1% for the NYSE Arca Pharmaceutical Index (DRG). In previews of Bayer’s results, the analysts at UBS suggested that its Crop Science division would be key, while those from J.P. Morgan expected “better Pharma results.” In the event, neither of Bayer’s two biggest divisions proved to be obvious drivers of stock strength. The reaction of the analysts from Jefferies was more logical, advising clients, just after Bayer’s announcement, to “expect a small negative response.”

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