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Baxter International Inc BAX

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Stock XNYS Rating as of
$36.51 −0.38 (1.03%)
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As of Delayed Price Closed
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Company Report

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Baxter Earnings: Legacy Hill Rom Woes Overshadow Rising Medical Utilization and 2024 Outlook

Julie Utterback

Narrow-moat Baxter turned in strong first-quarter results, and management raised its expectations for 2024 on those trends. However, a mild increase to our near-term expectations does not materially change our $67 fair value estimate. Shares remain steeply undervalued, in our opinion, and May 2's share decline appears related to disappointment that the legacy Hill Rom assets constrained this quarter's results that were otherwise strong on rising medical utilization and a cooling inflationary environment.

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Price vs Fair Value

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BAX is trading at a 45% discount.
Price
$36.89
Fair Value
$58.00
Uncertainty
High
1-Star Price
$556.39
5-Star Price
$24.40
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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Trading Information

Previous Close Price
$36.89
Day Range
$36.29–37.11
52-Week Range
$31.01–50.21
Bid/Ask
$36.11 / $36.87
Market Cap
$18.60 Bil
Volume/Avg
5.8 Mil / 3.8 Mil

Key Statistics

Price/Earnings (Normalized)
13.23
Price/Sales
1.24
Dividend Yield (Trailing)
3.18%
Dividend Yield (Forward)
3.18%
Total Yield
3.14%

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
Website
https://www.baxter.com

Competitors

Valuation

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Metric
BAX
FRE
ICUI
Price/Earnings (Normalized)
 13.236.2814.91
Price/Book Value
 2.280.831.15
Price/Sales
 1.240.711.07
Price/Cash Flow
 13.059.308.05
Price/Earnings
BAX
FRE
ICUI

Financial Strength

Metric
BAX
FRE
ICUI
Quick Ratio
 0.870.640.91
Current Ratio
 1.481.342.53
Interest Coverage
 0.822.120.16
Quick Ratio
BAX
FRE
ICUI

Profitability

Metric
BAX
FRE
ICUI
Return on Assets (Normalized)
 5.12%2.15%0.54%
Return on Equity (Normalized)
 20.26%7.52%1.13%
Return on Invested Capital (Normalized)
 7.70%3.57%2.60%
Return on Assets
BAX
FRE
ICUI
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