Bayer's Pharma Momentum Draws a Sharper Bull Case, but Cash Flow Still Holds the Reins
Published on 11/10/2026 at 22:02 | Editorial boerse-global.de
Bayer's pharmaceutical division is doing the heavy lifting in the investment case right now, and two broker notes published today capture just how differently that story can be read. Deutsche Bank Research lifted its price target on the German life-sciences group from 60 to 65 euros while keeping a Buy rating, according to media reports. Jefferies, by contrast, stayed on Hold with a 48.50 euro target — a level the stock has already left behind.
Shares were up 0.4% at 57.14 euros, comfortably above the Jefferies mark but still short of the Deutsche Bank objective.
The split in targets reflects a difference in emphasis rather than a dispute over facts. Analyst Michael Leuchten at Jefferies noted that the U.S. approval of Asundexian had arrived as expected, so the regulatory green light did not prompt any change to the house's recommendation. The FDA cleared the drug to reduce the risk of further strokes, and Bayer described it as the first approved Factor XIa inhibitor in the United States.
Earnings Revisions Carry More Weight Than the Target
At Deutsche Bank, analyst Virginie Boucher-Ferte raised her forecast for adjusted EBITDA in fiscal 2026 by roughly 3% to 10,060 million euros. The upgrade rests on the pharma business, while expectations for Crop Science were trimmed slightly. She also lifted her EBITDA and earnings-per-share estimates for 2027 and 2028 by about 3% apiece, extending the more confident view well beyond the current year.
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That broader time horizon is arguably the strongest part of the analysis. A higher valuation stands on firmer ground when projected profits climb across several fiscal years — provided the improved outlook shows up in actual trading.
The third-quarter figures give the pharma thesis some operational ballast. Pharma EBITDA rose 23.6%, with the margin reaching 27.6%. Nubeqa grew revenue by 58.3% in currency-adjusted terms to around one billion euros, while Kerendia posted a 64.9% sales increase.
Those numbers matter most if growth in established medicines translates durably into higher profitability. That is the yardstick against which Bayer's more optimistic earnings assumptions should be measured.
A Week-Old Guidance Raise Sets the Backdrop
The broker activity follows Bayer's decision roughly a week ago to improve its full-year 2026 outlook. Reuters reported that better-than-expected performance in the pharmaceutical division during the third quarter drove the upgrade. Bayer now expects EBITDA before special items of 9.8 to 10.3 billion euros for the year, up from a previous range of 9.6 to 10.1 billion euros.
Group revenue in the third quarter of 2026 climbed to 10.1 billion euros, with EBITDA before special items rising to 1.62 billion euros over the same period. Fourth-quarter 2026 results are scheduled for release on 24 February 2027.
The Financial Cross-Check Comes Up Short
For all the operational progress, the cash picture remains the weak link. Bayer recorded a net loss of 672 million euros in the third quarter of 2026 and a free cash flow of minus 293 million euros.
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That is the key qualification to the bullish case. Rising adjusted earnings strengthen Bayer above all when they also bring financial relief. Better cash generation would lend more weight to the operating advances and improve the footing for further debt reduction.
Net financial debt stood at 31.1 billion euros at the end of September 2026, a figure that already reflects three billion euros in proceeds from the Apollo transaction. The deal has provided some breathing room; a sustainably stronger balance sheet, though, will depend heavily on how free cash flow develops from here.
Bayer has made headway in both pharmaceuticals and deleveraging, yet a weaker agricultural business and the negative free cash flow cloud the overall picture. The more optimistic assessment is understandable as long as investors weigh the earnings improvement and financial resilience together. The next real test sits with cash generation — higher profit estimates only deserve lasting confidence once they turn into sturdier financing capacity.
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