Bayer shares: Price analysis before buying or selling

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ISIN code: DE000BAY0017

Ticker: ETR: BAYN

Index or market: DAX

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Elements to consider before selling or buying Bayer shares

Analysis N°1

We would of course monitor new medicines and treatments introduced onto the market that appear particularly promising or with high potential by this group.

Analysis N°2

The partnerships, mergers and acquisitions operations of the Bayer Group should also be closely monitored.

Analysis N°3

The Bayer group’s activities and future also depend on the growth of the cereal crops industry which should therefore be monitored carefully.

Analysis N°4

Of course, the world economy and particularly the problems encountered by the pharmaceutical industry are also influential factors on the Bayer share price.

Analysis N°5

Clearly the same is true for controls and regulations, notably those that relate to the prices of pharmaceutical products that could have negative consequences on the group’s profitability.

Analysis N°6

Finally, we would monitor the development of similar but low cost products by competitors and on their share of the market parts.

Analysis N°7

Since the acquisition of Monsanto by Bayer, we would also follow news relating to the use of glyphosate which is currently a frequent topic and could negatively influence the group’s sales.

Analysis before buying or selling Bayer shares

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General presentation of Bayer

Bayer is currently one of the chemical industry’s pillars in the creation, production and sale of pharmaceutical products. Its activities are spread across several sectors such as health products as well as high performance materials, agrochemical products and other less significant activities.

This company’s turnover is generated in countries including Germany, the United States, China and elsewhere.

The share price is currently quoted on the Prime Standard market of the Deutsche Bourse AG. The company is also part of the composition of the DAX 30 stock market index.

Photo credits: ©ricochet64/123RF.COM

The major competitors of Bayer

In order to better understand the Bayer Group's environment and to carry out relevant analyses of the share price, we now propose to discover the Group's main competitors and their activities.

Pfizer

First of all, the Pfizer group, which is an American company dating back to 1849, is one of Bayer's main competitors at present. The group operates in more than 150 countries around the world and is one of the world's leading companies in its sector in terms of market capitalisation and turnover. Pfizer employs more than 81,800 people worldwide, including some in Europe. It is mainly through mergers with other major companies such as Warner Lambert in 2000, Pharmacia in 2003 and Werth in 2009 that it has become the giant it is today.

Novartis

Another competitor of Bayer is the Novartis group. It is a Swiss pharmaceutical group created in 1996 from the merger of Geigy and Sandoz. Its headquarters are in Basel, Switzerland. It mainly develops pharmaceutical products for the treatment of cardiovascular, respiratory and dermatological diseases, gastrointestinal diseases, cancers, central nervous system disorders and hormonal disorders. It also markets generic drugs and eye care products such as eye drops, ophthalmic ointments, lens care products and ophthalmic surgical products.

Sanofi

The Sanofi group is a French transnational company with activities that include pharmaceuticals with prescription drugs in the fields of diabetes, rare diseases, multiple sclerosis and oncology as well as consumer health products and vaccines. Sanofi is currently the world's third-largest healthcare company in terms of sales, but ranks further down the list in terms of market capitalisation, at number 11. It generates most of its turnover outside Europe and has more than 100,000 employees in about 100 countries, including 22,450 in France. Finally, the Sanofi group is currently the third largest market capitalisation on the Paris stock exchange and is included in the CAC 40 stock market index.

Roche

The last competitor you should consider when analysing Bayer shares is Roche Holding. This company, also known as F.Hoffman La Roche, is a Swiss pharmaceutical company and one of the world's largest in this sector. Since 2004, the company's activities have been divided into two sectors

The major partners of Bayer

A number of strategic alliances and partnerships have also influenced the Bayer share price. Here are the major partners of this group.

Farm Frites

In 2015 Bayer CropScience and Farm Frites jointly opened sustainable practices in potato cultivation in Europe.

Leica Biosystems

In 2016 Bayer announced a new collaboration with Leica Biosystems to develop a new companion diagnostics test for cancer patients.

Monsanto

Finally, in 2017 Bayer found itself on the right path for the completion of the Monsanto acquisition before the end of the year for 66 billion dollars, as announced in September of that year. BASF SE and Syngenta AG were also companies that submitted preliminary applications for the assets that Bayer foresaw selling in order to obtain the regulatory approval for the acquisition of Monsanto.

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The factors in favour of a rise in the Bayer share price:

Firstly, we should of course underline the presence of Bayer on an international level which represents a major strength of this group. With more than 300 companies based in 78 different countries, the distribution system implemented by Bayer is solid as well as highly integrated. To achieve this Bayer has been able to count upon its experience of over 150 years in the sectors of health and agriculture.

Another considerable advantage for the Bayer Company concerns the division of its different activities into different sectors. The group has in fact structured its activities into three major groups with a pharmaceutical division, a consumer health and plant science sector and lastly the animal health sector which creates products and solutions for the treatment of domestic animals.

The Bayer Group is also renowned for its innovative capabilities which are a real advantage in this highly competitive activity sector. In fact, we owe a lot to the R & D division of Bayer for truly revolutionary products created in the past such as aspirin, Rennies, and Poncho. And the company continues to be innovative.

The excellent performance of the Bayer Company is also due to a particularly intelligent work organisation. The Bayer workforce of around 115,000 people worldwide is basically in continuous training and benefit from a healthy work environment which significantly increases the profitability of the group and also its innovative capabilities.

Finally, Bayer’s financial performance is satisfactory with a good solid treasury flow. The financial health of the company is therefore considered to be solid and reliable. The dividends paid are also attractive for shareholders of this asset.

The factors in favour of a drop in the Bayer share price:

Firstly the Bayer Company is subject to laws that are unfavourable to patents, notably by third world governments that particularly support local companies for the development of generic medicines.
The current regulatory environment is also an impediment to Bayer’s development. In fact, the FDA and other similar entities have recently strengthened the regulations applicable to drug testing and related fields due to numerous protests by human rights activists around the world.
Recently, the Bayer Group has also been subject to allegations related to price fixing which have severely tarnished its brand image and may continue to influence its sales in the future.
Finally, although the Bayer group, as with most of its competitors, has invested heavily on the development of biotechnical products, the highly complex manufacturing of these products also increases the risks.

To summarise, the weak points of this asset appear as significant and impactful as its advantages and it is therefore primordial that you take them into account when taking position on the price of this share on the stock markets.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

Who are the main subsidiaries of the Bayer group today?

If the Bayer group has managed to become one of the major players in the pharmaceutical sector today, it is undoubtedly thanks to its various investments in subsidiaries in Germany but also abroad. Today, the various subsidiaries owned by the Bayer group include Bayer Health Care AG which also includes Bayer Schering Pharma, Bayer CropScience AG, Bayer Material Science AG as well as Monsanto which was the last major acquisition made by this company for the purpose to diversify.

When did the takeover of Monsanto take place by the Bayer group?

Bayer’s takeover of Monsanto has been one of the most significant events in this company's history. This takeover was thus launched in 2016 by an offer made by Bayer and in the amount of $ 62 billion and after two weeks of rumors about it. It was in September of the same year that the group announced an increase in its offer to 66 billion dollars. It will finally be accepted by Monsanto on September 14 and Bayer will then officially announce the acquisition of this group.

Who are the three largest shareholders of the Bayer group?

Currently, the Bayer group is owned by various major shareholders, the first three of which we will present here in terms of shares. These include the BNP Paribas Asset management group which holds 6.65% of the group's shares, Temasek Holdings Pte Ltd which holds 3.71% of the capital and finally Norges Bank Investment Management with 3.01% of the shares.

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Analysis before buying or selling Bayer shares