Here's What the Street's Saying About Bayer's Share Price Plunge

(Bloomberg) -- Bayer AG’s shares are on course for their worst decline since 2003, after the German pharmaceuticals and chemicals conglomerate lost the first phase of a jury trial concerning claims that its Roundup weed killer causes cancer.

Banks are cutting their ratings and slashing price targets for the stock amid predictions that the firm could face more than $5 billion in settlements. It wasn’t all doom and gloom, however, with analysts at Barclays Plc among those urging investors to “weather the short-term pain.”

Here's What the Street's Saying About Bayer's Share Price Plunge

Here’s a summary of what’s been said:

MainFirst, Michael Leacock

Neutral, price target 60 euros

  • Cuts stock to neutral from buy as there’s “negligible chance of Bayer resolving/capping this issue in the near-term” and investors are likely to “stay away” until there is more clarity.
  • Price target cut to 60 euros from 90 euros.

Baader, Markus Mayer

Buy, price target 123 euros (street-high)

  • News is a “major blow,” and the stock’s fall toward its 2018 low could increase the chance of it becoming a target for activists or a takeover.

Goldman Sachs, Keyur Parekh

Buy, price target 78 euros

  • Overhang on Bayer shares “could be significant” as outcome was considered by some investors to be a potential bellwether for about 765 outstanding glyphosate cases.

Morgan Stanley, Joseph Lockey

Overweight, price target 82 euros

  • There was “budding enthusiasm” among investors for either a potential “surprise” verdict in favor of Bayer, or a hung jury, given multiple days elapsing during deliberations.

Bloomberg Intelligence, Michael Shah, Christopher Perrella

  • Bayer could face settlements of over $5 billion (vs. 2018 Ebitda of 9.5 billion euros), adding to credit concerns and questions on 2022 deleveraging goals.

Alphavalue, Martin Schnee

  • Downgrades to reduce from add due to uncertainty over final settlements.
  • Says company’s lowered valuation could trigger its break-up.

Barclays, Emmanuel Papadakis

Overweight, price target 85 euros

  • While the result likely pushes the ultimate settlement closer to 5 billion euros ($5.7 billion), “we continue to think the present special situation continues to offer an opportunity for those able to weather the short-term turbulence (and pain).”
  • Bank’s price target implies about 40 percent upside.

Citigroup, Peter Verdult

  • Steady heads are required as more than 20 billion euros of litigation risk was already priced into the shares.
  • Says more focus should be on an upcoming Hall versus Monsanto trial being held in St. Louis from April 1, which will better determine whether settlement estimates need to be refined.

Bernstein, Gunther Zechmann

Outperform, price target 86 euros

  • Any extreme weakness is an opportunity to buy as an ultimate liability well above the $5 billion mark is already “baked-in.”

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