UBS raises Bayer target share price €3, strong Q1

21 May 2007 13:48  [Source: ICIS news]

MUMBAI (ICIS news)--UBS on Monday raised its target share price for Bayer by €3 ($4) to €63 following strong first-quarter results.

 

The share price upgrade reflects a combination of better pharmaceutical earnings, mix improvements in cropscience, robust polyurethane markets, lower capex and non-operating result, analysts at UBS said.

 

UBS said it has also upgraded the German drugs and chemicals group’s earnings per share (EPS) estimates for the years 2007-2011 by 7% following Bayer’s financial performance which was ahead of forecasts.

 

Analysts at the UBS said despite lower than expected revenues the operating earnings before interest, tax, depreciation and amortization (EBITDA) margin came in at 28.5% ahead of the brokerage’s 23.6% forecast.

 

First-quarter core EPS came in at €1.23 and the majority of €1bn savings in pharmaceuticals, agro and Bayer Industry Services as well as benefits from deleveraging have yet to be realised.

 

UBS said although first quarter earnings remain seasonally strong the brokerage believes that Bayer can earn €4 per share 2008 onwards.

 

The brokerage maintained its “buy 2” rating on the Bayer stock.

 

($1=€0.74)

ICIS Copyright © Reed Business Information 2009

Author: Aarti Kapoor
+65 6780 4359

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