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The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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    Bayer share price: pharmaceutical credentials

    Most investors would intuitively assume that in the wake of the COVID-19 pandemic in Q1 this year, a multinational German pharmaceuticals and life sciences company might be expected to have been one of the stock market winners during 2020 in terms of Bayer shares.

    Indeed, the icing on the cake for the Bayer share price should have been recent newspaper reports that because of its anti-blood clotting properties, aspirin could be used in the fight against COVID-19, particularly given how the virus can cause blood clots in the lungs.

    However, so far even this potentially quite spectacular piece of newsflow for the inventor of aspirin has not prevented a decline for Bayer shares from a pre-pandemic high in February at €78 to a recent brief dip below €40.

    Learn more about shares trading with ATFX


    Monsanto woes for the Bayer share price

    But rather than focusing on potential miracle cures for COVID-19, investors understandably focused more on a Q3 net loss of €2.7 billion versus a profit of €1.05 billion the same time last year.

    The fact that the market was expecting a €798 million profit made the occasion of the latest Q3 results very much an update from hell. In fact, we are looking at a company in a legal nightmare, as it is embroiled in accusations that links Bayer’s glyphosate weedkiller with cancer.

    Rather sadly, the more that Bayer tries to extricate itself from this collateral damage which resulted from its acquisition of Monsanto, the deeper it digs itself and the Bayer share price into a financial hole. For instance, even after making a legal provision of some €9bn, it may have to allow for another €650m.

    Unfortunately, even without legal wrangles, Bayer shares are something of a leaky boat with new holes springing up all the time.

    For instance, the company has already had to issue a 2021 profits warning and fresh write downs regarding its agricultural business. This was due to the double whammy of falling crop prices and falling demand in key crops such as soybeans.


    2020: The year of biotech

    Of course, given that 2020 has been the year of the biotech / life science space off the back of the pandemic, one would have hoped that at least as far as Bayer’s pharma division there may be some good news on tap.

    Unfortunately, even here the sales over the year were down 1.8%. But this is almost a win as compared to the 11.6% decline in the agricultural part of the business.

    For investors looking for the bright spots in terms of the BAYN share price, it was simply a case of following its blockbuster drugs. The first is anticoagulant Xarelto up 9.4% versus the same quarter last year, and a 2.2% rise for macular degeneration treatment Eylea.


    Bayer share price: a bottom fishing opportunity?

    Ordinarily, investors would be looking at Bayer shares as a bottom fishing opportunity. It is usually the case that an unloved or unlucky company in a strong sector will re-rate once the market has factored in all the negatives, or at least can see estimates where closure might be.

    In the case of the Bayer share price we have the hope that it can maximise its blockbusters, and settle its legal issues. We may be near the end of the legal provisions, but it might be that bargain hunters near €40 wish to see more strength in the pharma area, for example positive sales growth, before entering the stock.

    The latest purchase of cell and gene therapy specialist AskBio could be a way of accelerating the pipeline of new products to potentially boost the Bayer share price, with a relatively modest $4bn price tag.


    BAYN share price: daily chart

    Although there has been a recent recovery for the Bayer share price, from just below €40, what may be key to possibly reverse the downtrend in the stock is a break back above former March support at €44.85.


    Daily chart showing Bayer share price daily movements for 2020


    How to trade Bayer shares

    Open a live or demo account with ATFX to get started today. Trade shares on leverage, take up a long or short position when trading with CFDs and make potential gains from price movements.

    1. Register for an account or log in to your existing account

    2. Open MT4 either on your desktop or mobile

    3. Search for Bayer share in the market watch or symbols window

    4. Choose your position size

    5. Hit buy or sell, and then confirm the trade


    Last Updated: 06/11/2020

    This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


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