STOCKS NEWS EUROPE-Bayer gains on Barclays, Merrill notes

Shares in Bayer AG (BAYGn.DE) gain 1.5 percent, making them one of the top gainers among German largecap stocks .GDAXI, afterBarclays initiates Bayer along with the European pharma sector with a "equal weight" rating and BofA Merrill Lynch adds healthcare to its most preferred list. "The medium-term growth outlook for Bayer, largely unaffected by patent expiration and U.S. healthcare reforms, looks relatively attractive once investors adjust to the likelihood that key pipeline drug Xarelto is going to be a commercial failure in strokes," BofA Merrill Lynch says in a note to clients.

"Following disappointing performance of the Material Science division and volatility in the Agrochemicals division over the last few quarters, we expect Bayer to demonstrate more stable performance going forward," it adds.

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