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With a market cap of $18.3 billion, Baxter International Inc. (BAX) operates in the healthcare and medical technology sector. Based in Deerfield, Illinois, the company develops and supplies a wide range of healthcare products globally, including renal care solutions, IV therapies, surgical devices, and patient monitoring technologies.
Shares of Baxter International have underperformed the broader market over the past 52 weeks. BAX stock has risen nearly 6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 31.2%. In 2024, shares of PFE are down 6.9%, compared to SPX's 19.9% gain on a YTD basis.
Looking closer, BAX has also lagged behind the Health Care Select Sector SPDR Fund's (XLV) 15.3% returns over the past 52 weeks and a 7.8% YTD gain.
Baxter's underperformance is driven by shrinking profit margins and a disappointing sale of its Vantive Kidney Care business. Additionally, the company's stock is significantly lower than its pre-inflation levels, reflecting broader market challenges and its struggles to keep pace with peers.
However, BAX shares climbed 6.6% on Aug. 6 due to a solid Q2 earnings beat, with adjusted EPS of $0.68 surpassing estimates and reflecting a 23.6% year-over-year increase. The company's revenue from continuing operations grew 3% to $3.8 billion, driven by strong demand in high-margin areas like Infusion Therapies and Drug Compounding, both of which exceeded analyst expectations. Additionally, Baxter raised its full-year adjusted EPS guidance range to $2.93 - $3.01, enhancing investor optimism.
For the current fiscal year, ending in December, analysts expect BAX's EPS to grow 13.9% year-over-year to $2.96. The company's earnings surprise history is promising. It beat the consensus estimates in all of the last four quarters.
Among the 13 analysts covering the stock, the consensus rating is a “Hold.” That’s based on two “Strong Buy” ratings, 10 “Holds,” and one “Moderate Sell.”
This configuration is slightly less bullish than three months ago, with three “Strong Buy” ratings on the stock.
On Oct. 1, Citi raised Baxter's price target to $40 with a “Neutral" rating, expressing caution over MedTech stocks in Q3 due to historical challenges and potential impact on 2025 forecasts.
As of writing, BAX is trading below the mean price target of $40.75. The Street-high price target of $46 implies a modest potential upside of 27.8%.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
