DE40: Bayer slashes its dividend by 95% 💡

• European markets gain slightly during Tuesday's session
• Fresenius Medical publishes quarterly results
• Bayer cuts its dividend by 95%

Overall market situation

Tuesday's session on European stock markets brings mixed investor sentiment. Most of the Old Continent's indices are up today, but their scale is not overly large. In this respect, the Polish WIG20 stands out above all today, which is currently the growth leader in the region. Investors' attention is today focused on the results of Fresenius Medical and the Bayer dividend decision. 

European companies listed during Tuesday's trading session are currently trading at mixed levels. Source: xStation 5

The German benchmark DE40 remains within the constraints set by the 17,100-point barrier during Tuesday's session. From a technical point of view, further increases and a possible breakout above the 17,150-point zone could encourage the buyers' side to retest the recent local maxima of 16 February. The most important zone of possible support could now be the local low marked by the 50-day exponential moving average (blue curve on the chart). Source: xStation 5

News:

Shares of Fresenius Medical (FME.DE) are losing nearly 1% during today's session following the release of quarterly results. Analysts at Citi commented that Q4 results were "largely quiet", while forecasts for 2024 are also in line with expectations.

FOURTH QUARTER RESULTS

• Operating income EU428 million, +22% y/y, estimate EU381.7 million (Bloomberg Consensus)
• Revenue EU4.99 billion, -0.2% y/y, estimate EU4.97 billion
• Operating income excluding special items EU555 million, +13% q/q, estimate EU467.4 million
• Net income EU188 million, estimate EU177.2 million
• Net income excluding special items EU259 million, estimate EU230 million
• Basic EPS EU0.64, estimate EU0.57
• Basic earnings per share excluding special items EU0.88, estimate EU0.82

2023 YEAR RESULTS

Dividend per share EU1.19, estimate EU1.02

COMMENTARY AND CONTEXT

• Expects operating income to grow by a mid- to high-teens percent rate compared to prior year
• The 2023 basis for the revenue outlook is €19.05 billion and for the operating income outlook is €1.54 billion, both numbers are adjusted for the positive impact of the Tricare settlement and the operating business impact from divestments closed by year-end 2023
• The company reaffirms its targets to achieve an operating income margin of 10% to 14% by 2025. This excludes impacts from portfolio changes

Source: xStation 5

Bayer (BAYN.DE) shares are gaining 1% today after the German agri-pharmaceutical conglomerate announced it would cut its dividend by 95% after an avalanche of bad news halved its market capitalisation over the past year. A spoiling factor for sentiment around the company is the continuing lawsuits over the use of Roundup. As reported by Morgan Stanley, the move will support the company's budget by nearly €5.2 billion. 

Analyst recommendations:

Bernstein reiterated a 'buy' rating on shares of Siemens Healthineers (SHL.DE). Target price of €66.5 per share.