As of June 1, 2025, Bayer AG's estimated intrinsic value ranges from $12.62 to $131.81 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $52.10 | +110.6% |
| Discounted Cash Flow (5Y) | $26.91 | +8.8% |
| Dividend Discount Model (Multi-Stage) | $12.62 | -49.0% |
| Earnings Power Value | $131.81 | +432.9% |
Is Bayer AG (BAYN.DE) undervalued or overvalued?
With the current market price at $24.73, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Bayer AG's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 2.8% | 3.3% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 1.23 | 1.52 |
| Cost of equity | 9.1% | 13.1% |
| Cost of debt | 4.0% | 7.0% |
| Tax rate | 10.4% | 26.5% |
| Debt/Equity ratio | 1.67 | 1.67 |
| After-tax WACC | 5.6% | 8.1% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $27 | $61,812M | 87.4% |
| 10-Year Growth | $52 | $86,551M | 75.4% |
| 5-Year EBITDA | $10 | $45,180M | 82.7% |
| 10-Year EBITDA | $25 | $59,722M | 64.3% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $10,961M |
| Discount Rate (WACC) | 8.1% - 5.6% |
| Enterprise Value | $135,276M - $194,439M |
| Net Debt | $35,370M |
| Equity Value | $99,906M - $159,069M |
| Outstanding Shares | 982M |
| Fair Value | $102 - $162 |
| Selected Fair Value | $131.81 |
| Metric | Value |
|---|---|
| Market Capitalization | $24300M |
| Enterprise Value | $59670M |
| Trailing P/E | 0.00 |
| Forward P/E | 0.00 |
| Trailing EV/EBITDA | 8.45 |
| Current Dividend Yield | 53.93% |
| Dividend Growth Rate (5Y) | -53.36% |
| Debt-to-Equity Ratio | 1.67 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $15.63 |
| Discounted Cash Flow (5Y) | 29% | $6.73 |
| Dividend Discount Model (Multi-Stage) | 24% | $2.52 |
| Earnings Power Value | 12% | $13.18 |
| Weighted Average | 100% | $44.78 |
Based on our comprehensive valuation analysis, Bayer AG's weighted average intrinsic value is $44.78, which is approximately 81.0% above the current market price of $24.73.
Key investment considerations:
Given these factors, we believe Bayer AG is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.