Bayer: S&P lowers outlook
Rating agency S&P has again taken a more detailed look at Bayer's financial situation. In an assessment issued Thursday, the internationally renowned US credit rating agency became more skeptical about the outlook for the Leverkusen-based company. However, its credit rating remains unchanged.
This week, S&P lowered its outlook for Bayer from "stable" to "negative." This move is due to additional provisions recently recognized by Bayer in connection with the glyphosate complex. However, the US rating agency maintains its "BBB" credit rating for Bayer.
A lower rating can potentially lead to higher interest rates and difficulties in raising capital. Bayer is saddled with a large mountain of debt, which has skyrocketed primarily due to the multi-billion dollar acquisition of Monsanto a few years ago.
As of the end of June, the DAX-listed company's net financial debt stood at a whopping €33.3 billion, a significant decrease compared to the same period last year (€36.8 billion). However, this is still more than its current market capitalization of approximately €27 billion. Furthermore, Bayer again reported negative free cash flow in the first half of the year.
Bayer is heavily indebted, and CEO Bill Anderson intends to address this with massive austerity measures (including a leaner corporate structure, job cuts, and the temporary payment of a statutory minimum dividend). The reduction will take a long time. The glyphosate litigation in the US also remains problematic and continues to weigh on Bayer's balance sheet. This is also underscored by the recent change in the outlook from the rating agency S&P. Investors remain on the sidelines of the DAX stock.
Note on conflicts of interest:
The board member and majority shareholder of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has directly or indirectly entered into positions in the following financial instruments or derivatives related to them mentioned in the publication, which may benefit from any price developments resulting from the publication: Bayer.
"Winning the Loser's Game" originates from a magazine article for which Charles D. Ellis received the prestigious Graham & Dodd Award. In it, the author made a pioneering case for a strategy of diversified, low-cost investing in index funds, which he further expanded upon in his book. Now in its eighth, updated edition, this classic is truly contemporary. New additions include chapters on how technology and big data are challenging traditional investment decisions and how investor behavior influences returns. It also presents new research supporting Ellis's approach and cautions against investing in bonds. A comprehensive guide to long-term investing, successfully updated to reflect the realities of today's markets.
deraktionaer.de
