Downbeat Outlook for Bayer in 2023
The company stated that earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted for special items, are expected to be between 12.5 billion euros and 13 billion euros in 2023, excluding currency swings. This is a decline from the 13.5 billion reported in 2022, up 20.9% from the previous year.
New CEO Appointed to Simplify Diversified Structure
Bayer replaced its CEO this month, recruiting former Roche executive Bill Anderson amid demands from investors for the company to simplify its structure and split into separate groups. The company's outgoing CEO, Werner Baumann, defended the company's presence in agriculture and healthcare, stating that "we're active in the right fields since health and nutrition are fundamental human needs."
Impact of U.S. Lawsuits and Lower Glyphosate Prices
Bayer has stated that the settlement of U.S. lawsuits claiming that glyphosate caused cancer and environmental pollution will cost the company 2-3 billion euros this year. Lower glyphosate prices and further markdowns for the stroke prevention pill Xarelto, the group's best-selling pharmaceutical, will also impact the company's earnings.
Shares Down 4.6% Following Guidance Announcement
Shares of Bayer were down 4.6% following the guidance announcement, and many investors believe there is little upside potential for the company. Capital market strategist Juergen Molnar stated that Bayer should be on the buy list of only a few investors.