Analysis of Bayer's SCOTUS Case Risk Exposure and Valuation Recovery Potential

Based on the above data analysis, I now provide you with an in-depth analysis report on Bayer’s SCOTUS case risk exposure and its valuation recovery potential.

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The U.S. Supreme Court (SCOTUS) announced on January 16, 2026 that it will hear the

, a core litigation in the Roundup herbicide lawsuits facing Bayer following its acquisition of Monsanto[1][2]. The core legal issue SCOTUS will review is whether the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) preempts state-level label warning obligations, i.e., whether federal regulations can bar plaintiffs from filing product liability lawsuits based on state law[3].

• April 2025
  : Monsanto filed a petition for certiorari with SCOTUS
• June 17, 2025
  : SCOTUS requested the Department of Justice to provide its opinion
• January 16, 2026
  : SCOTUS granted certiorari to hear the case
• June 2026
  : Ruling expected

According to public data, Bayer has settled nearly

through a settlement program of approximately [4]. However, there are still about , and SCOTUS’s ruling will determine the future trajectory of these lawsuits[5].

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Indicator	Value
Current Price (US: BAYRY)	$12.95
Current Price (Europe: BAYN)	€39.71
1-Day Return	+6.41%
1-Month Return	+23.92%
3-Month Return	+65.60%
1-Year Return	+131.25%
52-Week Range	$5.30 - $13.00

After SCOTUS announced on January 16, 2026 that it would hear the Durnell case, Bayer’s stock price surged

, marking its largest single-day gain in recent times[6]. The market interpreted this as a positive signal that Bayer may obtain federal preemption protection, thereby limiting potential liability from future lawsuits.

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raised its target price for Bayer from , maintaining its rating[6]. This 37.5% upward adjustment reflects:

1. Expected Reduction in Legal Risk
   : If SCOTUS rules that federal preemption applies, potential litigation exposure will be significantly reduced
2. Valuation Re-Room
   : After legal uncertainty is eliminated, the value of the company’s core businesses can be re-evaluated
3. Improved Cash Flow
   : Reduced litigation-related provisions and costs will enhance financial flexibility

Rating Type	Number of Analysts	Percentage
Buy	10	52.6%
Hold	9	47.4%
Sell	0	0%
Average Target Price	€34.97	-11.93% downside potential

The current European share price of €39.71 is slightly higher than the average target price, reflecting that the market has already partially priced in optimistic expectations regarding the SCOTUS case[7].

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Scenario	Intrinsic Value	Relative to Current Price ($12.95)
Bear Case	$7.77	-40.0%
Base Case	$10.16	-21.5%
Bull Case	$16.04	+23.9%
Probability-Weighted Valuation	$11.32	-12.6%

Parameter	Bear Case	Base Case	Bull Case
Revenue Growth Rate	0.0%	3.0%	6.0%
EBITDA Margin	6.9%	7.3%	7.6%
Terminal Growth Rate	2.0%	2.5%	3.0%
Cost of Equity	12.2%	10.7%	9.2%
Cost of Debt	6.8%	5.8%	4.8%

• The current share price ($12.95) is approximately
  27%
  higher than the DCF base case valuation ($10.16)
• If SCOTUS issues a favorable ruling, the bull case ($16.04) may become the new valuation anchor
• The bear case ($7.77) represents downside risk in the worst-case scenario

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Valuation Benchmark	Price	Relative to Current Share Price (€39.71)
Current Price	€39.71	Benchmark
Morgan Stanley Target Price	€55.00	+38.5%
52-Week High	€39.99	+0.7%
Historical High (2019)	~€120	+202%

• Potential Upside:
  +50% to +100%
• Drivers: Substantial elimination of litigation risk, accelerated business restructuring
• Catalyst: Market repricing after the June 2026 ruling

• Potential Downside:
  -30% to -50%
• Risk Factors: New litigation exposure, additional settlement costs
• Risk premium re-incorporated

• Potential Volatility Range:
  ±20%
• Mixed scenario, legal uncertainty persists

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Risk Category	Estimated Amount	Probability-Adjusted Amount
Settled Lawsuits	$11 billion	$11 billion (realized)
Pending Litigation Exposure	$5-10 billion	$3-6 billion
Future Litigation Risk	Difficult to quantify	$1-3 billion
Total Legal Risk Exposure	$15-24 billion	$15-20 billion

Impact Dimension	Probability of Favorable Ruling	Probability of Unfavorable Ruling	Valuation Impact
Federal Preemption Applies	35%	65%	+/- $3-5 per share
State Law Lawsuits Continue	25%	75%	+/- $2-3 per share
Additional Settlement Costs	20%	80%	+/- $1-2 per share
Elimination of Regulatory Uncertainty	45%	55%	+/- $2-4 per share

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1. Narrowing of Legal Risk Premium
   : The SCOTUS ruling will either eliminate or confirm legal uncertainty
2. Emergence of Core Business Value
   : The Agricultural Science Division (Crop Science) has annual sales of approximately
   €14 billion
   with robust profitability
3. Diversified Business Portfolio
   : Pharmaceuticals and consumer health businesses provide cash flow support
4. Historical Valuation Comparison
   : The current price-to-sales ratio is approximately
   1.2x
   , lower than the historical average of
   2.5x

Risk Type	Risk Description	Potential Impact
Legal Risk	Unfavorable SCOTUS ruling	20-40% decline in share price
Regulatory Risk	Expansion of glyphosate bans	10-15% decline in sales
Operational Risk	Excessive debt burden	Decline in interest coverage capacity
Foreign Exchange Risk	Euro/USD fluctuations	Fluctuations in revenue and profit

• March 2026
  : Q4 earnings report release, update on litigation provisions
• June 2026
  : SCOTUS ruling release
• Second Half of 2026
  : Clarification of litigation settlement framework

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Bayer’s SCOTUS case risk exposure is the core variable currently impacting its valuation recovery. The fact that

reflects the market’s positive expectations for a favorable legal ruling[6].

1. Short-term (+38.5%)
   : Reach Morgan Stanley’s target price of €55, requiring a SCOTUS ruling confirming federal preemption applies
2. Mid-term (+50-100%)
   : If the ruling significantly reduces litigation exposure and business restructuring progresses smoothly
3. Long-term (+200%+)
   : Return to historical valuation levels, requiring complete resolution of legal disputes and resumption of growth

: Considering that the current share price has rebounded more than from the 52-week low of $5.30, the market may have already partially priced in optimistic expectations. Investors should closely monitor the June 2026 SCOTUS ruling and maintain prudent risk exposure management before the ruling.

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[1] Bayer Official Statement - “Bayer welcomes the U.S. Supreme Court decision to review the Durnell case” (https://www.bayer.com/media/en-us/bayer-welcomes-the-us-supreme-court-decision-to-review-the-durnell-case-in-the-roundup-litigation/)

[2] The New Lede - “Bayer gets boost as US Supreme Court says it will hear Roundup case” (https://www.thenewlede.org/2026/01/bayer-gets-boost/)

[3] Lawsuit Information Center - “Monsanto Roundup Lawsuit January 2026 Update” (https://www.lawsuit-information-center.com/roundup-lawsuit.html)

[4] Multiple Legal Sources - Roundup lawsuit settlement statistics (As of fall 2025, nearly 100,000 Roundup lawsuits settled as part of Bayer’s $11 billion resolution effort)

[5] Legal Expert Analysis - Remaining 5,000-10,000 lawsuits pending nationwide

[6] Investing.com - “Morgan Stanley raises Bayer stock price target to EUR55 on litigation view” (https://www.investing.com/news/analyst-ratings/)

[7] Investing.com - “Bayer AG (BAYGn) Stock Forecast & Price Target” (https://www.investing.com/equities/bayer-ag-consensus-estimates)

[8] Market Data - Real-time stock quotes and historical price data from financial data providers