Bayer Raises 2026 Outlook as Pharma Beats Expectations, Shares Jump 5%

German drugs and crop science group Bayer raised its 2026 targets for earnings, cash flow and debt on Tuesday after its pharmaceuticals division outperformed in the third quarter, the company announced.

The Leverkusen-based company now expects currency-adjusted EBITDA before special items of €9.8 billion to €10.3 billion this year, up from its earlier range of €9.6 billion to €10.1 billion. It lifted its free cash flow forecast by €1 billion to between minus €1.5 billion and minus €0.5 billion, and lowered its year-end net financial debt projection to €28 billion to €29 billion from €29 billion to €30 billion.

Group sales rose 4.1% to €10.05 billion in the July-September quarter, or 1.9% after adjusting for currency and portfolio effects. EBITDA before special items increased 6.9% to €1.62 billion, which Reuters said was about 13% ahead of analysts’ expectations. Bayer shares were up 5% by 10:44 GMT, Reuters reported.

Bayer remained loss-making at the bottom line. It booked a net loss of €672 million, narrower than the €963 million loss a year earlier, after a €307 million impairment on its Xofigo brand and a €215 million impairment on Claritin. Core earnings per share fell to €0.31 from €0.49, which the company linked to non-cash charges from interest rate changes.

Pharma drives the upgrade

Pharmaceuticals sales climbed 8.0% to €4.68 billion, 5% above analysts’ forecasts in a Vara Research poll cited by Reuters. The division’s EBITDA before special items jumped 23.6% to €1.29 billion, lifting its margin to 27.6%. Bayer raised its 2026 pharma margin target to 25%-27% from 23%-25%, and said divisional sales growth is now heading towards the upper end of its guidance range.

Nubeqa sales grew 58.3% on an adjusted basis to roughly €1 billion in the quarter, while Kerendia rose 64.9%. Xarelto and Eylea declined 30.7% and 23.5% respectively. Chief Executive Bill Anderson said the business had “reached a turning point in Pharma’s growth trajectory”.

Crop Science and Consumer Health lag

Crop Science sales edged up 0.7% to €3.88 billion but fell 2.4% on an adjusted basis, and the division’s EBITDA before special items dropped 41.3% to €101 million. Fungicides and herbicides excluding glyphosate each declined 8.6%. Consumer Health sales rose 2.1% to €1.45 billion, while its EBITDA slipped 4.4% to €347 million. Bayer said both units were performing in line with their targets.

Free cash flow was negative €293 million in the quarter, compared with a positive €596 million a year earlier, partly because of higher payments to resolve legal proceedings. Net financial debt fell to €31.08 billion at the end of September, a decline Bayer largely attributed to a €3 billion payment from Apollo Global Management for a minority stake in a newly established entity. Chief Financial Officer Judith Hartmann said the quarter gave the company confidence to improve its targets on adjusted EBITDA, cash and debt.

What’s next

Bayer said it won last week the first glyphosate case to go to trial since the US Supreme Court’s 7-2 ruling, and Anderson said the company is awaiting an important decision on its class settlement. On the earnings call, he said final court approval could come “any week now”, likely before Christmas, according to an Investing.com transcript. Bayer confirmed all of its other group targets from its half-year report.

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