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Baxter International Inc BAX

Morningstar Rating
$42.74 +0.05 (0.12%)
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Company Report

Obesity Drug's Effects on Dialysis Likely To Be Less Than Feared

GLP-1 drug use is increasing materially in patients with diabetes and obesity, and uncertainty around GLP-1 expansion has added risk to dialysis stocks even as pandemic challenges, including excess mortality and labor costs, are easing for the narrow moat dialysis companies we cover—Baxter, DaVita, Fresenius Medical Care, and Fresenius SE. Despite the concerns, new data rolling in on GLP-1s appears roughly in line with our view that GLP-1 expansion should not materially affect dialysis demand for at least the next decade, as mildly extended kidney disease progression to dialysis may be largely offset by cardiac and first-year survival, or "crash," benefits. Considering this roughly neutral outlook, we find the significant discounts to fair value in dialysis-related stocks compelling.

Price vs Fair Value

BAX is trading at a 38% discount.
Price
$41.79
Fair Value
$37.00
Uncertainty
High
1-Star Price
$425.35
5-Star Price
$99.10
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

In the long run, Baxter should continue to grow at a decent clip, primarily around evolutionary innovation in all of the major business lines and moderate pricing or mix improvements.

Bears

Although Baxter's products are essential for medical care and patient health, many have similar alternatives, which can limit pricing power.

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News

Trading Information

Previous Close Price
$42.69
Day Range
$42.6143.12
52-Week Range
$31.0150.21
Bid/Ask
$42.39 / $43.12
Market Cap
$21.77 Bil
Volume/Avg
4.0 Mil / 4.0 Mil

Key Statistics

Price/Earnings (Normalized)
15.83
Price/Sales
1.46
Dividend Yield (Trailing)
2.71%
Dividend Yield (Forward)
2.71%
Total Yield
2.71%

Company Profile

Baxter offers a variety of medical instruments and supplies to caregivers. It enhanced its portfolio of hospital-focused offerings by acquiring Hillrom in late 2021, which added basic equipment, including hospital beds, to the portfolio, although about half of Hillrom's revenue comes from more digitally connected offerings like its smart beds and Voalte medical communications app. From its legacy operations, Baxter offers tools to help patients with acute and chronic kidney failure, which it plans to spin off by mid-2024. It also sells a variety of injectable therapies for use in care settings, such as IV pumps, administrative sets, and solutions; nutritional products; and surgical sealants and hemostatic agents.
Sector
Healthcare
Industry
Medical Instruments & Supplies
Stock Style Box
Mid Value
Total Number of Employees
60,000

Competitors

Valuation

Metric
BAX
FRE
ICUI
Price/Earnings (Normalized)
15.835.6415.88
Price/Book Value
2.580.741.22
Price/Sales
1.460.631.14
Price/Cash Flow
15.088.328.57
Price/Earnings
BAX
FRE
ICUI

Financial Strength

Metric
BAX
FRE
ICUI
Quick Ratio
0.910.640.91
Current Ratio
1.481.342.53
Interest Coverage
0.662.120.16
Quick Ratio
BAX
FRE
ICUI

Profitability

Metric
BAX
FRE
ICUI
Return on Assets (Normalized)
4.63%2.15%0.54%
Return on Equity (Normalized)
19.64%7.52%1.13%
Return on Invested Capital (Normalized)
6.97%3.57%2.60%
Return on Assets
BAX
FRE
ICUI
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Medical Instruments & Supplies Industry Comparables

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Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
ISRG
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BDX
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ALC
Alcon IncCysdhpfnKxvzpsx$40.7 Bil
CLPBY
Coloplast A/S ADRLxhrjnsgvsLglg$30.4 Bil
RMD
ResMed IncYrpwyvfzmLpwhzgc$29.1 Bil
WST
West Pharmaceutical Services IncVpfcbffrhWcmn$29.0 Bil
COO
The Cooper Companies IncLwhtpxkvDwjwj$20.2 Bil
HOLX
Hologic IncMbgqltyfMnbpsc$18.3 Bil
TFX
Teleflex IncRzwlCgr$10.6 Bil

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