Bayer shares soar in Frankfurt; analysts are optimistic following the landmark ruling by the US Supreme Court
Deutsche Bank has upgraded its recommendation to “buy”, following the ruling in the company’s favour in the billion-dollar glyphosate lawsuits relating to the herbicide’s alleged carcinogenicity
(Il Sole 24 Ore Radiocor) - Bayer is leading the way on the Frankfurt Stock Exchange, thanks to positive comments from Deutsche Bank analysts and also to the decision to set up a separate entity dedicated to the US operations of the controversial herbicide glyphosate. Shares in the German pharmaceutical and agrochemical giant rose by around 5 per cent, putting it in first place among the components of the DAX index. The share price climbed to €51.80, its highest level since August 2023.
Analysts at Deutsche Bank have upgraded their recommendation on the share to ‘buy’ from ‘hold’ and raised the target price from 45 to 60 euros, following the landmark ruling by the US Supreme Court in favour of Bayer concerning the multi-billion-euro glyphosate lawsuits relating to the herbicide’s alleged carcinogenicity.
DB’s experts believe that the group is now on a positive trajectory and that the focus should gradually shift to the fundamentals and growth prospects of the Crop and Pharma sectors. The German group has also announced its intention to consolidate its US herbicide-related activities into a dedicated subsidiary.
The spin-off forms part of the five-year programme to streamline operations presented last year for the Crop Science agricultural division, Bayer explained. The new company is called Ruveon and includes the production of Roundup, the brand name under which the glyphosate-based herbicide is marketed. Based in St Louis, Missouri, Ruveon will supply the US agricultural sector with “essential glyphosate-based products, meeting the highest standards of quality and service”, according to a press release. Ruveon remains a subsidiary of the Bayer Group.
The US Supreme Court has ruled in favour of Bayer regarding allegations of ‘failure to provide information’ concerning the labelling of glyphosate, which form the basis of the majority of the litigation. Although this ruling does not eliminate all legal risks, industry observers believe it will significantly reduce out-of-court settlements relating to Roundup cases.
