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Bayer's stock dropped to its lowest in two decades, with shareholders urging CEO Bill Anderson to speed up restructuring and efficiency improvements to boost drug development and restore confidence.

What does this mean?

Despite restructuring efforts like job cuts and streamlined decision-making, Bayer hasn't seen a financial turnaround, top shareholder Deka Investment notes. Declining farmer incomes are straining the agricultural sector, affecting Bayer, BASF, and Corteva. Bayer also faces a setback with delayed US soy seed approval, jeopardizing 2025 earnings. The $63 billion Monsanto acquisition remains a burden due to debt and ongoing US litigation over Roundup. CEO Anderson aims to reduce these uncertainties while leveraging new drug successes like Nubeqa and Kerendia, as Xarelto sales decline post-patent.

Bayer's stock might tempt value investors, with a PE ratio of 3.9, much lower than BASF's 11.5 and Corteva's 18.7. Still, BMO Capital Markets analysts are hesitant to recommend buying, citing earnings contractions. The shares are undervalued, tied to expected lower profit growth than competitors.

The bigger picture: Innovation under pressure.

Bayer's challenges highlight trends in the pharmaceutical and agricultural sectors, where innovation faces economic and regulatory hurdles. With global agricultural demand softening and legal battles over past decisions persisting, companies like Bayer must navigate these pressures while pursuing new drug developments and strategic shifts to stay competitive.