1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Capital Allocation
PREMIUM
Narrow-moat Baxter mildly beat adjusted EPS expectations in the second quarter and raised the bottom end of its adjusted EPS guidance range for 2021. However, this mild increase in near-term profit trends does not substantially affect our $80 fair value estimate. Shares remain about fairly valued, in our opinion.
Baxter manufactures medical products across seven major reported business segments. The renal segment (32% of 2020 sales) includes peritoneal dialysis and hemodialysis products for chronically ill patients while the acute therapies segment (6%) offers kidney or other organ support tools in intensive care situations. The medication delivery segment (23% of sales) sells IV pumps, administrative sets, and solutions while the nutrition segment (8% of sales) offers parenteral nutrition therapies. The pharmaceuticals segment (18% of sales) offers injectable drugs, anesthetic gases, and compounding services. The advanced surgery segment (8% of sales) provides hemostatic products and biosurgical sealants. Contract manufacturing rounds out the remaining sales.
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