Stocks in Bayer are receiving a buy recommendation, potentially indicating commencement of recovery within the DAX Group
Bayer's stock is showing signs of a possible recovery, trading near its 52-week high of about $8.65 (OTC market, BAYRY), currently at around $8.29-$8.30. This modest gain and a Relative Strength Index (RSI) of 55 indicate neutral to slightly bullish momentum, suggesting the stock is not overbought [1][2].
The forward price-to-earnings ratio (P/E) of about 5.96 to 6.63 indicates that Bayer is trading at a low valuation relative to expected earnings, often a positive sign for a turnaround [1][2]. However, financially, Bayer reported a net loss of about €4.01 billion (negative earnings per share near -4.09), though losses have narrowed compared to previous years [1][3]. Despite this, recent quarterly earnings slightly beat estimates with positive EPS of $0.65 [3].
Revenue remains strong at over €54 billion trailing twelve months, but the company still faces margin pressures due to generic competition, especially impacting key products like Xarelto [2]. Bayer's diversified business model—pharmaceuticals, consumer health, and crop science—provides stability but also complexity, with crop science affected by past Monsanto acquisitions and pharma facing patent cliffs and pricing pressures [1][2].
Technically, the stock is above its 50-day and 200-day moving averages ($7.81 and $6.70 respectively), signaling a positive technical trend [3]. However, trading volumes are currently low compared to average, which could imply limited short-term momentum [1][2].
While the stock is showing tentative signs of recovery, ongoing risks from generic drug competition and margin pressures remain. Investors considering Bayer now should weigh potential growth from new drug launches against these structural challenges. The heavily beaten DAX corporation Bayer may be starting a recovery phase, but it remains a moderate-risk investment requiring careful monitoring rather than a definitive buy signal at this moment [1][2][3].
In the past week, Bayer's stock has significantly risen, making it one of the biggest weekly winners in the DAX. However, long-term investors should exercise caution when engaging with Bayer's stock due to the company's tense fundamental situation, particularly concerning the debt situation and gaps in the drug pipeline [1][3].
References:
[1] MarketWatch. (2022). Bayer AG (BAYRY) Stock Price, News, Quote & History. [online] Available at: https://www.marketwatch.com/investing/stock/bayry
[2] Yahoo Finance. (2022). Bayer AG (BAYRY) Stock Quote. [online] Available at: https://finance.yahoo.com/quote/bayry
[3] Reuters. (2022). Bayer beats quarterly earnings estimates, raises full-year outlook. [online] Available at: https://www.reuters.com/business/healthcare-pharmaceuticals/bayer-beats-quarterly-earnings-estimates-raises-full-year-outlook-2022-04-28/
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