Bayer Shares Jump After Pharma Recovery Prompts Outlook Raise

Bayer shares rose after the German group raised its full-year earnings guidance, citing a recovery in its pharmaceutical business that allowed it to mitigate market pressures at its agricultural and consumer-health divisions.

Shares in Bayer were up 5.6% in European morning trading Tuesday, adding to recent gains that have led the stock to roughly double its value over the past year.

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Bayer has been working to turn around its pharma division, after patent expirations for blood thinner Xarelto and eye medicine Eylea weighed on its results lately, while the company sought to move past U.S. legal battles over its Roundup weedkiller and reduce its debt pile.

The company credited strong demand for prostate-cancer drug Nubeqa and kidney and heart medicine Kerendia with driving growth at the top and bottom lines for its pharma business. And higher profitability expectations for the pharma unit, in turn, prompted the group to revise its guidance for underlying earnings upward.

"We've reached a turning point in pharma's growth trajectory and we're beginning to see the other side," Bayer Chief Executive Bill Anderson said.

Bayer now expects full-year earnings before interest, taxes, depreciation and amortization to range from 9.8 billion to 10.3 billion euros ($10.96 billion-$11.52 billion), excluding the effect of currency changes and exceptional items. It had previously forecast a result between 9.6 billion and 10.1 billion euros.

The company also upgraded its full-year outlook for cash flows and net debt. It now expects to end the year with net debt at between 28 billion and 29 billion euros, against its previous target of between 29 billion and 30 billion euros, as it expects to bleed less cash than previously forecast.

For the pharma business, the company now expects an adjusted Ebitda margin of between 25% and 27% for 2026 as a whole, up from its previous forecast of between 23% and 25%.

Bayer said quarterly sales at its pharma division were up 6.4% when excluding currency and portfolio changes, led by increases of 58% and 65% for Nubeqa and Kerendia, respectively. The two drugs also fueled higher profitability, with adjusted Ebitda for the division jumping 24% to 1.29 billion euros.