Bayer shares fell after the company reported fourth-quarter earnings that topped expectations but delivered a profit outlook for 2026 that fell short of analyst consensus. The German life sciences group posted fourth-quarter sales of €11.44 billion, slightly above the €11.34 billion consensus estimate, driven by stronger Crop Science performance. Adjusted EBITDA reached €1.97 billion, beating estimates, but the margin contracted sharply. Crop Science delivered the strongest results with sales of €5.40 billion and €766 million adjusted EBITDA, while Pharmaceuticals underperformed. However, the company's 2026 guidance of €43.7 billion to €45.7 billion in net sales and €4.00 to €4.50 per-share earnings came in below the €9.67 billion and €4.72 consensus forecasts, causing the stock drop. Free cash flow is projected to remain negative, and debt is expected to rise to €32 billion to €33 billion.

Crop Science was the clear driver of the quarterly beat, with sales and EBITDA exceeding estimates despite pricing pressures. Pharmaceuticals lagged, and Consumer Health underperformed expectations. The guidance shortfall overshadowed the Q4 strength, reflecting challenges in scaling profitability across Bayer's divisions. Analysts noted the margin contraction and elevated debt levels as key concerns, with Jefferies' Chris Counihan highlighting Crop Science's contribution to the earnings beat.

The guidance miss suggests investor caution ahead, as the company projects slower growth and higher costs in 2026. While Q4 revenue growth was solid, the downward revision in full-year targets indicates persistent headwinds in key markets and potential integration costs from recent acquisitions. The stock reaction underscores the market's focus on long-term profitability over short-term earnings surprises, with shares dropping on the news of the outlook reduction.