Bayer shares posted the strongest gains on the DAX on Thursday and were among the biggest risers in Europe, boosted by an upgrade from Goldman Sachs, which upgraded its recommendation to "buy."

At around noon, shares in Germany's leading pharmaceutical group climbed more than 5% to return to their highest levels since last October. The stock is also the third best performer on the STOXX 600.

In a note, analysts at the US bank said they believe the stock's risk/return profile has improved significantly as we approach H2 2025, which they believe could see several catalysts support a revaluation of the stock in the medium term.

The firm points out that its 'neutral' rating was previously based on a negative perception of the group's fundamentals, particularly regarding the momentum of revisions to market consensus estimates.

However, Goldman believes that recent positive developments on the legal front could be a significant supporting factor, noting that a favorable ruling by the US Supreme Court in the Roundup case could unlock upside potential of 10% to 25% from current levels.

In addition to the legal aspects, analysts are reassured by the company's operating performance since the beginning of the year, both in terms of cost discipline in its crop science division and the solid momentum of its pharmaceuticals business.

We believe that Bayer may have reached the bottom of the negative earnings revision cycle, Goldman concludes, whose target price of €33 implies around 30% upside potential.


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