) divulged its sales growth expectations for three of its major
segments through 2016. These segments - HealthCare, Crop Science
and Material Science - accounted for approximately 47.1%, 22% and
28% of €40.2 billion of total revenues in 2013.
Bayer's HealthCare segment has been posting impressive sales on
the back of encouraging performance of its newly launched
pharmaceutical products. The segment's sales are expected to grow
by 6% (on an adjusted basis) annually on an average through 2016.
The HealthCare segment posted sales of €18.9 billion in 2013.
Bayer also raised its peak annual sales of the five newly
launched pharmaceutical products - Xarelto (anticoagulant), Eylea
(eye drug), Stivarga (oncology), Xofigo (oncology) and Adempas
(pulmonary hypertension) - to at least €7.5 billion from the
prior forecast of over €5.5 billion. In 2014, sales from these
products are expected to be around €2.8 billion.
Fueled by the performance of these newly launched products, the
pharmaceutical subgroup of the HealthCare segment is expected to
exhibit annual sales growth of 8% on an adjusted basis through
2016. The subgroup contributed around €11.2 billion to segmental
sales in 2013. The HealthCare segment's other subgroup, the
Consumer Health segment, is expected to exhibit annual sales
growth of 6% on an adjusted basis through 2016 on the back of
strong performance of its non-prescription medicines and animal
health businesses. The Consumer Health segment contributed around
€7.7 billion to segmental sales in 2013.
Bayer's Crop Science segment is expected to grow by 6% (on an
adjusted basis) annually on an average through 2016. The
company's Crop Science business posted sales of €8.8 billion in
2013. Segmental sales are expected to benefit from encouraging
performance of the Crop Protection business which is expected to
achieve sales of €2.6 billion in 2016 compared with €1.5 billion
Meanwhile, Bayer remains cautious about its Material Science
business, which is expected to earn its cost of capital by 2016.
The segment contributed €11.2 billion last year.
We are encouraged by the company's guidance through 2016, and
particularly pleased with the expected growth rate of the
company's newly launched pharmaceutical business. The Material
Science business outlook is also impressive, given the kind of
market environment it was experiencing in recent times.
Bayer presently carries a Zacks Rank #4 (Sell). Some
better-ranked stocks include
Alexion Pharmaceuticals, Inc.
Gilead Sciences Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
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