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Baxter International Inc. (BAX), headquartered in Deerfield, Illinois, develops and provides a portfolio of healthcare products. With a market cap of $19.5 billion, the company develops, manufactures, and markets products and technologies related to hemophilia, immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and BAX perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the medical instruments and supplies industry. Baxter excels through diversified healthcare products and innovative expansions. Strategic acquisitions enhance its connected care solutions, while investments in new launches and geographic growth solidify its medical technology leadership.
Despite its notable strength, BAX shares have slipped 12% from their 52-week high of $44.01, achieved on Mar. 8. Over the past three months, BAX stock has gained 14.2%, outperforming the Health Care Select Sector SPDR Fund’s (XLV) 4.8% gains during the same time frame.
However, in the longer term, shares of BAX rose marginally on a YTD basis and climbed 3.7% over the past 52 weeks, underperforming XLV’s YTD gains of 12.3% and 18% returns over the last year.
Despite weak price momentum in the long term, BAX has been trading above its 50-day moving average since mid-July. It has been trading above its 200-day moving average since late August, with slight fluctuations recently, indicating a bullish trend.
Baxter faced headwinds from supply chain disruptions, soft dialysis demand, and margin pressure across segments, resulting in its underperformance this year. Additional challenges include order delays in Healthcare Systems & Technologies and elevated debt from the Hillrom acquisition.
On Aug. 13, BAX shares closed down more than 6% after selling its kidney-care unit to Carlyle Group Inc. (CG) for $3.8 billion. The Kidney-care unit accounted for about a third of Baxter’s revenue last year.
However, on Aug. 6, BAX shares closed up more than 6% after reporting its Q2 earnings results. Its adjusted EPS of $0.68 exceeded Wall Street expectations of $0.66. The company’s revenue of $3.8 billion exceeded forecasts of $3.7 billion. For Q3, BAX expects its adjusted EPS to be between $0.77 and $0.79, while full-year adjusted EPS is projected to be between $2.93 and $3.01.
BAX’s rival, Becton, Dickinson and Company (BDX), has had a rough ride. BDX's shares plummeted 2.7% on a YTD basis and have plunged 9.1% over the past 52 weeks, lagging behind BAX’s modest gains in the same time frame.
Wall Street analysts are cautious about BAX’s prospects. The stock has a consensus “Hold” rating from the 13 analysts covering it, and the mean price target of $40.75 suggests a potential upside of 5.3% from current price levels.
On the date of publication, Neha Panjwani 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.
