Bayer Faces Pivotal June as Q1 Profit Doubles but Legal Cash Burn Deepens

Bayer's Q1 adjusted EPS doubles to €2.71 on resilient Crop Science, but legal overhang from Roundup settlement and Supreme Court preemption case keeps shares under €38.

Bayer has opened 2026 with a striking operational performance, yet the spectre of US litigation looms larger than ever. First-quarter adjusted earnings per share came in at €2.71, more than double the year-earlier figure, while group revenue climbed to €13.4 billion — a currency-adjusted increase of 4.1%. The Crop Science division, long a pillar of the business, proved more resilient than many analysts had anticipated. Despite this, the stock ended Friday at €37.72, down nearly 1% and still trading below its 50-day moving average of €38.84.

Investor caution is understandable. The company is in the throes of two major legal events that could reshape its liability profile. A Missouri judge has given preliminary approval to a $7.25 billion settlement designed to resolve existing and future claims from individuals who developed non-Hodgkin lymphoma after prolonged exposure to Roundup’s glyphosate. Members of the class have until 4 June 2026 to opt out, and Bayer retains the right to walk away if too many claimants choose to pursue their own lawsuits. Payouts would be stretched over as long as 21 years.

Parallel to that, the US Supreme Court heard oral arguments on 27 April in Monsanto v. Durnell, a case that tests whether federal pesticide labelling requirements pre-empt state-level failure-to-warn claims. Bayer contends that plaintiffs cannot sue under state law when the Environmental Protection Agency has not mandated a cancer warning for the product. The justices’ questions offered no clear verdict — Chief Justice John Roberts and Justice Neil Gorsuch appeared sceptical of Bayer’s position, as did Justice Ketanji Brown Jackson — but the debate suggested the court is giving the company’s arguments a serious hearing. A ruling is expected by the end of June.

The financial toll of the legal battles is already visible. Bayer posted a free cash flow deficit of €2.32 billion in the first quarter, driven largely by increased disbursements for PCB and glyphosate litigation. Net cash outflow reached €2.002 billion. To preserve liquidity for debt reduction, the company held its dividend at the statutory minimum of €0.11 per share.

Amid the legal noise, Bayer is trying to build a stronger pharmaceutical future. It announced an agreement to acquire Perfuse Therapeutics, a specialist in ischaemia-related eye diseases. The total deal value could reach $2.45 billion, with an upfront payment of $300 million. The transaction gives Bayer rights to PER-001, a drug candidate targeting glaucoma and diabetic retinopathy, and fits strategically with its ophthalmology franchise as Eylea faces mounting competition from biosimilars. Separately, the FDA last year approved Lynkuet (elinzanetant), a potential talking point for management at the Deutsche Bank European Champions Conference in Frankfurt on 27 May.

Chart watchers see a test of the €39.00 level as the first hurdle to break the current sideways drift, with support around €37.00. Over the past 30 days, the shares have lost 7.41%. On a 12-month basis, however, they are still up roughly 65% from the 52-week low touched in May 2025, though that still leaves them 23% below the February high of €49.17.

The next few weeks will be decisive. After the opt-out deadline on 4 June, attention will shift to the Supreme Court ruling due by end of June, followed by a fairness hearing on 9 July. For CEO Bill Anderson, the sequence will determine whether his goal of substantially containing Roundup litigation by year-end remains achievable. The operational strength is there — the question is whether the legal overhang will finally ease enough to let the market price it in.