Baxter stock tumbled Tuesday, undercutting its 50-day line, after the medtech company agreed to sell its kidney segment to Carlyle for $3.8 billion.
The deal follows Baxter's announcement in January 2023 that it would separate the Vantive Kidney Care segment into a stand-alone company.
But Evercore ISI analyst Vijay Kumar says this came in at the lower end of Baxter stock investors' expectations. Last year, the kidney care business generated $4.45 billion in sales, accounting for about 30% of Baxter's total revenue.
Still, "renal issues and timing constraints likely played a role," he said in a report.
On today's stock market, Baxter stock skidded 6.6% to 34.51. Shares fell below their 50-day moving average, MarketSurge shows.
Baxter Stock: $3 Billion In Proceeds
Carlyle, a private equity investor, is buying Vantive in a partnership with Atmas Health. Atmas is a collaboration of three industry executives that focuses on acquiring and building health care businesses.
Kieran Gallahue, one of the Atmas executives, will serve as the chairman of Vantive. Chris Toth, executive vice president and group president for Baxter's kidney care division, will be the new company's chief executive.
For 2025, Baxter called for an adjusted operating margin of 16.5%. That visibility should provide some cushion for Baxter, Evercore's Kumar said. He kept his outperform rating on Baxter stock.
After taxes, Baxter expects to receive $3 billion in cash proceeds. The company also raised its guidance and now expects sales to grow 4% to 5%. That's up from Baxter's previous outlook for 3% sales growth, issued Aug. 6 alongside the second-quarter earnings report.
Baxter stock ran up 6.6% on the earnings report, touching its 200-day line. Shares have lingered at that ceiling since then, until Tuesday's downfall.
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