Bayer raises 2026 profit outlook as pharma business beats expectations

By Tristan Veyet and Patricia Weiss

Nov 3 (Reuters) - German pharmaceuticals and agriculture group Bayer raised its 2026 profit outlook on Tuesday, citing a better-than-expected performance at the company's pharmaceuticals business in the third quarter.

The upgrade sent Bayer's shares up 5% by 1044 GMT.    

Bayer has been weighed down by heavy debt since its $63 billion acquisition of Monsanto in 2018, a deal that also burdened the group with costly litigation relating to Monsanto's weedkiller Roundup.

The company now expects full-year adjusted core earnings, on a currency-adjusted basis, to total between €9.8 billion and €10.3 billion ($11 billion and 11.5 billion), from a previously expected range of €9.6 billion and €10.1 billion.

Bayer's pharmaceuticals business posted sales of €4.68 billion in the third quarter, 5% above analysts expectations in a poll by Vara Research.

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

The company reported third-quarter earnings before interest, taxes, depreciation and amortization, adjusted for one-offs, of €1.62 billion, around 13% ahead of analysts' expectations.

It cut net financial debt expectations for the year by €1 billion, now expecting it at between €28 billion and €29 billion.

ROUNDUP SETTLEMENT EXPECTED ANY WEEK NOW

Anderson also said that Bayer expects a $7.25 billion settlement on its Roundup weedkiller to come before Christmas.

"We're expecting an approval from the court," Anderson said in a press call.

"It could be any week now," he added.

Bayer is seeking to resolve tens of thousands of claims in US state and federal courts from plaintiffs, who say they developed cancer after using Roundup. The settlement is under review by a Missouri state court judge in St. Louis.

"Judicial approval of the proposed glyphosate settlement is expected by the end of the year. This should then largely reduce Bayer’s litigation risks, allowing management to refocus fully on operational and strategic issues," Markus Manns, portfolio manager at Frankfurt-based Union Investment, said.

(Reporting by Tristan Veyet in Gdansk, Patricia Weiss in Frankfurt, editing by Linda Pasquini, Louise Heavens and Susan Fenton)