Bayer AG (BAYRY) reported fourth quarter core earnings per share of 0.90 surpassing 0.71 reported in the year-ago period. Bayer has been shifting its focus towards its HealthCare segment over the past few years in order to maintain solid growth in the long run.

While we are pleased with the growth recorded by the HealthCare segment, we remain concerned with the disappointing performance of the Material Science segment. Moreover, we are disappointed with the delay in approval of Xarelto, one of Bayer’s most promising pipeline candidates.

In addition, the outlook for 2010 provided by the company is not quite encouraging. Given these factors, we downgrade the stock to Underperform from Neutral.Zacks Investment Research