Bayer AG (BAYGn.DE): Crop Seasonality weighs on 3Q'26, litigation worries resurfacing but could be unjustified - remain Buy

Seasonality impacts surrounding the CropScience business suggest downside to consensus estimates for 3Q26, in a very similar pre-3Q scenario to 12 months ago. Our estimates are broadly in line with Visible Alpha consensus on revenue but 8% below on EBITDA (before special items) and 38% below on Core EPS. Despite the weaker 3Q26 numbers vs. consensus, we expect Bayer will reiterate FY26 guidance, further highlighting that the 3Q weakness is largely a phasing issue, suggesting limited risks of revisions following the results. Three new Glyphosate cases filed relating to Product Design Defects appear to have reignited litigation worries, but we highlight there are only three cases out of 65k and we do not yet know the final opt-out proportion, and therefore believe these concerns could be unjustified. Bayer is still awaiting a decision on whether Judge Boyer will approve the $7.25bn glyphosate settlement. We remain Buy rated with a 12-month price target of €63.5, as litigation overhangs c