On Wednesday, Stifel, a financial services firm, adjusted its outlook on Bayer AG (ETR:BAYGN) (BAYN:GR) (OTC: BAYRY), reducing the price target to €30.00 from the previous €42.00, while maintaining a Hold rating on the stock. The revision was based on an analysis of historical Price-to-Earnings (P/E) and Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization (EV/EBITDA) multiples projected for the fiscal year 2024.
The firm anticipates the first quarter clean EBITDA for Bayer (OTC:BAYRY) AG to be €4 billion, marking an 11% decrease year-over-year, which is lower than the consensus estimate of €4.2 billion. The decline is primarily attributed to the Crop Science division, but expectations fall below the consensus across all three of Bayer's business segments.
Despite the weaker start to the year, Stifel forecasts an improvement in the second half of 2024, citing cost savings and favorable comparisons from the previous year. Nonetheless, the firm's full-year EBITDA projection for Bayer stands at €10.1 billion, which is at the lower end of the company's provided guidance range and represents a 4% decrease compared to the consensus.
The adjustment in the price target reflects Stifel's conservative earnings forecast for Bayer AG, which is influenced by the performance across its various divisions and the overall market conditions expected for the remainder of the year. The Hold rating indicates that Stifel advises investors to maintain their current positions in Bayer AG without increasing or decreasing their stake at this time.
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