Bayer Raises Its 2026 Profit Outlook as Pharmaceuticals Beats Expectations

Bayer raised its full-year 2026 profit outlook on Tuesday after pharmaceuticals beat expectations in the third quarter, powered by its cancer and kidney drugs.

Bayer is a German life-science group selling prescription drugs, seeds and crop chemicals, and consumer brands. It reported third-quarter results, ended September 30, on Tuesday, November 3.

EBITDA before special items is earnings before interest, taxes, depreciation and amortization, excluding one-off items. Bayer treats it as its core profit measure.

The outlook rose on pharmaceuticals strength

Bayer now expects group EBITDA before special items of EUR 9.8 billion to EUR 10.3 billion in 2026. The previous range was 9.6 billion to 10.1 billion euros. The figures are currency-adjusted, meaning stated without currency swings.

That is announced company guidance, not a result. Bayer cited better-than-anticipated pharmaceuticals performance in the first nine months. It raised the division's margin guide to 25 percent to 27 percent, from 23 percent to 25 percent.

“We’re confident in 2026. We’ve got more work to do, but we’re moving in the right direction,” chairman and chief executive Bill Anderson said. All other group guidance was confirmed, including sales of forty-five billion to forty-seven billion euros.

Group sales and core profit rose; the bottom line did not

Group sales were 10.05 billion euros, up 4.1 percent as reported. Currency- and portfolio-adjusted sales rose 1.9 percent. Adjusted growth strips out currency moves and portfolio changes, so it tracks underlying demand.

EBITDA before special items rose 6.9 percent to 1.62 billion euros. Its margin reached 16.1 percent of sales, up from 15.6 percent. Pharmaceuticals supplied the growth; crop science and consumer health earnings both fell.

Analysts in a Vara Research poll expected pharmaceuticals sales about 5 percent lower than reported. Crop science core earnings of 101 million euros missed the 164 million euros analysts expected.

Nubeqa and Kerendia carried pharmaceuticals

Pharmaceuticals sales rose 8.0 percent as reported to 4.68 billion euros. Adjusted sales rose 6.4 percent. Division EBITDA before special items rose 23.6 percent to 1.29 billion euros, and its margin reached 27.6 percent.

Cancer drug Nubeqa sales rose 60.5 percent to 998 million euros. Kidney drug Kerendia sales rose 69.2 percent to 374 million euros. Radiology also grew, helped by higher United States volumes.

Eye drug Eylea sales fell 23.4 percent to 560 million euros. Blood thinner Xarelto sales fell 30.2 percent to 377 million euros. Bayer said both declines came as expected, after patent expirations opened the drugs to generic competition.

“We’ve reached a turning point in Pharma's growth trajectory and we’re beginning to see the other side,” Anderson said. The quote captures the claim behind the raise: newer drugs are now outgrowing the patent losses.

Crop science shrank on an adjusted basis; consumer health was flat

Crop Science sales were 3.88 billion euros, up 0.7 percent as reported. Adjusted sales fell 2.4 percent, on regulatory impacts and adverse weather in Europe and Asia. Division EBITDA before special items fell 41.3 percent to 101 million euros.

The crop margin was 2.6 percent of sales, in the seasonally smallest quarter. Strong Latin American seed demand partly offset weakness elsewhere.

Consumer Health sales were 1.45 billion euros, up 2.1 percent as reported. Adjusted sales rose just 0.1 percent. Division EBITDA before special items fell 4.4 percent to 347 million euros, a margin of 24.0 percent, after higher marketing spending.

Impairments and litigation kept the group in loss

Net special charges in operating profit were 407 million euros. Litigation and legal charges accounted for 161 million euros. Two brand impairments did most of the remaining damage.

Bayer wrote down the Xofigo cancer brand by 307 million euros in pharmaceuticals. The charge sat in intangible assets and followed revised sales projections. It also wrote down the Claritin allergy brand by 215 million euros in consumer health, after a higher cost of capital.

Operating profit, or EBIT, was a loss of 110 million euros. That improved from a loss of 543 million euros a year earlier. EBIT before special items fell 43.0 percent to 297 million euros, so the underlying operating line weakened.

Net income was a loss of 672 million euros, narrower than a loss of 963 million euros. Earnings per share were a loss of 0.69 euros. Core earnings per share fell 36.7 percent to 0.31 euros, from 0.49 euros, on a weaker core financial result and higher taxes.

Cash weakened in the quarter, but the year-end path improved

Operating cash flow fell to 631 million euros, from 1.69 billion euros. Free cash flow, operating cash flow after capital spending, was negative 293 million euros, against positive 596 million euros.

Net financial debt still fell to 31.08 billion euros at September 30. That was down 5.0 percent year on year and down about 2.5 billion euros in the quarter. A payment of three billion euros from Apollo Global Management was the main driver.

The full-year cash guide rose by one billion euros with the outlook. Bayer now expects free cash flow of minus EUR 1.5 billion to minus EUR 500 million. Excluding legal settlements, it expects three billion to four billion euros, and year-end net debt of twenty-eight billion to twenty-nine billion euros.

At September 30 closing rates, the profit range equals 9.6 billion to 10.1 billion euros. The confirmed core earnings per share guide is 4.30 euros to 4.80 euros, currency-adjusted.

What remains unknown

What remains unknown starts with litigation. The quarter carried 161 million euros of litigation and legal charges, and the statement does not settle what further charges the year will bring. Settlement payments are also the gap between the two free cash flow guides.

Whether pharmaceuticals can hold this pace is unproven. The raise assumes Nubeqa and Kerendia keep outgrowing the Eylea and Xarelto declines. Crop science must also recover from its adjusted sales fall.

What to watch next

What to watch next starts with fourth-quarter pharmaceuticals sales. Another adjusted gain near the third quarter's 6.4 percent would support the raised margin guide. Watch Nubeqa's approach to one billion euros in quarterly sales.

Then watch the year-end debt print against the new guide. Debt inside the new range would confirm the cash path. Any new large litigation charge would test the cash range directly.