UPDATE 1-Bayer Q3 core profit drops on weak plastics demand

*Q3 operating profit down 4.2 pct on weak plastics demand

*Confirms outlook for 2008

FRANKFURT, Oct 29 (Reuters) - Bayer (BAYG.DE: Quote, Profile, Research, Stock Buzz) said on Wednesday that third-quarter core profit slid 4.2 percent as strong demand for its farming pesticides failed to offset a slump at its plastics and foams unit.

Earnings before interest, taxes, depreciation, amortisation (EBITDA) and special items, fell to 1.493 billion euros ($1.87 billion), below the average estimate of 1.53 billion euros in a Reuters poll of 13 analysts.

Bayer confirmed it plans to increase 2008 core earnings from last year's level and said it continued to expect an EBITDA margin before special items of 22 percent for the group in 2009.

The company also continues to target growth of more than 5 percent in currency- and portfolio-adjusted group sales to about 33 billion euros in 2008.

Bayer shares are valued at about 9.4 times estimated 2009 earnings, more than the 7.7 multiple for the European chemicals sector but below the healthcare industry, which trades at a 10.7 ratio.

Shares of the German chemical-drugs hybrid have lost almost 40 percent this year, trailing the 14.6 percent decline in the European DJ Stoxx healthcare index but outperforming the 46 percent slump in the chemicals benchmark . (Reporting by Ludwig Burger; Editing by Quentin Bryar)