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Baxter International (BAX)
NYSE:BAX
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Baxter International
(NYSE:BAX)54Neutral
Positive Factors
Analyst Coverage
Goldman Sachs relaunches coverage of Baxter (BAX), indicating renewed interest and potential opportunities with the company.
Financial Performance
Q4 revenue and EPS of $2.75B and $0.58 beat Street targets of $2.67B and $0.52.
Negative Factors
Operational Challenges
BAX expects operating margin to fall 90-100bps year-over-year, which implies margin of ~13.7% including stranded cost and hurricane impact.
Baxter International (BAX) vs. S&P 500 (SPY)
Market Cap
$17.66B
Dividend Yield2.64%
Average Volume (3M)5.16M
Price to Earnings (P/E)136.1
Beta (1Y)0.62
Revenue Growth-14.00%
EPS Growth-184.82%
CountryUS
Employees60,000
SectorHealthcare
Sector Strength74
IndustryMedical Equipment & Supplies
Share Statistics
EPS (TTM)-1.27
Shares Outstanding511,625,000
10 Day Avg. Volume6,795,268
30 Day Avg. Volume5,155,837
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.66
Price to Cash Flow (P/CF)9.10
P/FCF Ratio4.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$37.89Price Target Upside8.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Baxter International Business Overview & Revenue Model
Company DescriptionBaxter International Inc. is a global healthcare company that develops, manufactures, and markets a diverse portfolio of essential products and services. The company operates in various sectors, including renal care, medication delivery, pharmaceuticals, clinical nutrition, and advanced surgery. Baxter is committed to saving and sustaining lives by providing innovative healthcare solutions that improve patient outcomes and meet the needs of healthcare professionals worldwide.
How the Company Makes MoneyBaxter International generates revenue through the sale of its broad range of healthcare products and services. Key revenue streams include the sale of renal care products such as dialysis machines and consumables, intravenous therapies, and nutritional products. Additionally, the company earns income from its pharmaceuticals division, which produces generic injectable drugs and other critical care medications. Baxter also benefits from its advanced surgery segment, supplying hemostats and sealants used in surgical procedures. The company's global presence and strategic partnerships with healthcare providers and distributors further bolster its revenue by expanding market reach and driving sales across various regions.
Baxter International Financial Statement Overview
Summary
Baxter International is facing financial headwinds characterized by declining revenue, inconsistent profitability metrics, and cash flow challenges. The company has managed to slightly improve its debt position, but overall financial health remains a concern with negative operating cash flow and weakening equity metrics. Strategic interventions are needed to stabilize and enhance financial performance.Income Statement
Baxter International has experienced significant revenue fluctuations, with a decline in Total Revenue from 2022 to 2024. The Gross Profit Margin showed some resilience but has been negatively impacted by operational challenges, leading to negative EBIT and EBITDA margins in 2024. The company suffered a net loss in 2024, reflecting financial strain. Overall, profitability has been inconsistent, with a concerning trend toward declining net income.45
Neutral
Balance Sheet
The company's debt-to-equity ratio has improved slightly from 2023 to 2024, indicating a cautious approach towards managing debt. However, the equity ratio has decreased due to reduced stockholders' equity, reflecting potential financial vulnerability. Despite this, Baxter maintains substantial total assets, suggesting the potential for recovery with strategic financial management.55
Neutral
Cash Flow
Baxter's cash flow situation is challenging, with a significant decline in operating cash flow in 2024 and negative free cash flow growth. The absence of positive operating cash flow raises concerns about the company's ability to generate sufficient internal funds to cover expenses and invest in growth. The free cash flow to net income ratio is unfavorable, indicating strains in converting earnings to cash.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.51B | 14.81B | 15.11B | 12.78B | 11.67B | Gross Profit |
| 1.70B | 4.97B | 5.40B | 5.11B | 4.59B | EBIT |
| -112.00M | 390.00M | -549.00M | 779.00M | 603.00M | EBITDA |
| -112.00M | 1.68B | -849.00M | 2.52B | 2.54B | Net Income Common Stockholders |
| -312.00M | 2.66B | -2.42B | 1.28B | 1.10B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.76B | 3.19B | 1.72B | 2.95B | 3.73B | Total Assets |
| 25.78B | 28.28B | 28.29B | 33.52B | 20.02B | Total Debt |
| 13.37B | 14.36B | 17.21B | 18.31B | 6.80B | Net Debt |
| 11.61B | 11.17B | 15.49B | 15.36B | 3.07B | Total Liabilities |
| 18.76B | 19.81B | 22.39B | 24.40B | 11.29B | Stockholders Equity |
| 6.96B | 8.40B | 5.83B | 9.08B | 8.69B |
| Cash Flow | Free Cash Flow | |||
| 559.00M | 1.03B | 532.00M | 1.48B | 1.16B | Operating Cash Flow |
| 1.02B | 1.73B | 1.21B | 2.22B | 1.87B | Investing Cash Flow |
| -410.00M | 3.21B | -931.00M | -11.20B | -1.18B | Financing Cash Flow |
| -1.08B | -3.49B | -1.44B | 8.24B | -345.00M |
Baxter International Technical Analysis
Positive
34.79
Price Trends
31.24
Positive
32.60
Positive
33.92
Positive
Market Momentum
1.05
Negative
65.39
Neutral
69.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BAX, the sentiment is Positive. The current price of 34.79 is above the 20-day moving average (MA) of 32.48, above the 50-day MA of 31.24, and above the 200-day MA of 33.92, indicating a bullish trend. The MACD of 1.05 indicates Negative momentum. The RSI at 65.39 is Neutral, neither overbought nor oversold. The STOCH value of 69.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BAX.
Baxter International Risk Analysis
Baxter International disclosed 31 risk factors in its most recent earnings report. Baxter International reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Baxter International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $239.35B | 18.07 | 28.12% | 1.62% | 4.59% | 134.50% | |
78 Outperform | $398.27B | 28.57 | 19.68% | 2.96% | -4.51% | 3.69% | |
77 Outperform | $119.32B | 28.28 | 8.63% | 2.96% | 2.72% | 4.48% | |
73 Outperform | $64.76B | 37.47 | 6.85% | 1.70% | 5.89% | 42.05% | |
65 Neutral | $148.49B | 39.28 | 7.87% | 0.53% | -13.50% | -17.25% | |
54 Neutral | $17.66B | 136.07 | -4.48% | 2.64% | -14.00% | -184.82% | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
BAX
Baxter International
34.79
-6.52
-15.78%
ABT
Abbott Labs
137.58
21.47
18.49%
BDX
Becton Dickinson
224.27
-5.28
-2.30%
DHR
Danaher
205.91
-47.39
-18.71%
JNJ
Johnson & Johnson
165.42
10.42
6.72%
MDT
Medtronic
93.03
11.22
13.71%
Baxter International Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: 13.43% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
Baxter showed strong recovery and operational performance in Q4 2024, beating guidance and setting a positive tone for 2025. Despite challenges from Hurricane Helene and declines in Frontline Care, the company's strategic initiatives and product launches are expected to drive growth. The sentiment is balanced, with notable achievements in product launches and recovery efforts, but offset by the impact of external challenges and operational pressures.Highlights
Strong Finish to 2024
Baxter exceeded fourth-quarter guidance for continuing operations on both top and bottom lines, driven by better-than-expected sales and solid operational performance.
Recovery from Hurricane Helene
Swift recovery efforts from Hurricane Helene resulted in sales being $45 million better than expected. The North Cove site returned to pre-hurricane levels with all manufacturing lines operational.
Infusion Pump Platform Success
The Novum IQ infusion pump platform saw a strong rollout in the U.S., contributing to a 50% growth in the infusion business in 2024.
Pharmaceuticals Segment Growth
Pharmaceuticals sales increased 8% in Q4 and 7% for the full year, driven by strong demand for U.S. pre-mixed products and new product launches.
2025 Sales and Earnings Guidance
Baxter expects total sales growth of 5% to 6% on a reported basis and adjusted earnings per share of $2.45 to $2.55.
Lowlights
Impact of Hurricane Helene
Hurricane Helene negatively impacted Q4 sales by approximately $110 million and full-year growth by over 100 basis points.
Challenges in Frontline Care
Q4 sales in Frontline Care declined 8%, impacted by backlog reductions, market exits, and supply constraints.
Operating Margin Pressures
Adjusted gross margins in Q4 declined slightly by 10 basis points year-over-year due to Hurricane Helene and higher manufacturing costs.
Foreign Exchange and Interest Expenses
Negative impact on earnings from foreign exchange and interest expenses amounted to approximately $0.06 per share in Q4.
Company Guidance
In the fourth quarter of 2024 earnings call, Baxter International provided guidance for the upcoming fiscal year 2025, highlighting several key metrics and strategic priorities. The company anticipates full-year sales growth of 5% to 6% on a reported basis, factoring in a 200 basis points negative impact from foreign exchange and $345 million in anticipated manufacturing service agreement (MSA) revenues from Vantive. Baxter projects operational sales growth of 4% to 5%, excluding foreign exchange, MSA revenues, and a 50 basis points headwind from exiting the IV Solutions market in China. Segment-wise, Medical Products & Therapies (MPT) is expected to grow by approximately 5%, Healthcare Systems & Technologies (HST) by 3%, and Pharmaceuticals by 5% to 6%. The company aims to achieve a full-year adjusted operating margin of approximately 16.5% and anticipates adjusted earnings per share to range between $2.45 and $2.55. The first quarter of 2025 is expected to see operational sales growth of around 3% to 4% and adjusted earnings per share of $0.47 to $0.50, despite a 200 basis points foreign exchange headwind and a $60 million contribution from MSA revenues. The guidance reflects ongoing efforts to enhance innovation, optimize cost structures, and harness commercial excellence to drive profitable growth.Baxter International Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Baxter International Announces Leadership Transition and Appointments
Neutral
Feb 3, 2025
On February 3, 2025, Baxter International announced the transition of José E. Almeida from his roles as CEO and Chair to a non-executive advisory position, effective the same day, with Brent Shafer appointed as interim CEO and Chair. The company has initiated a search for a permanent CEO while appointing Heather Knight as Chief Operating Officer. These leadership changes are aligned with Baxter’s strategic transformation and growth objectives, following significant business repositioning under Almeida’s tenure.
Executive/Board ChangesM&A TransactionsBusiness Operations and Strategy
Baxter International’s Strategic Divestment and Leadership Changes
Neutral
Feb 3, 2025
On January 31, 2025, Baxter International Inc. completed the sale of several entities, including Vantive Health LLC and Gambro Renal Products, to a consortium of buyers for approximately $3.71 billion in cash after adjustments. This transaction marks a significant divestment for Baxter, likely impacting its strategic focus and operations, as well as the stakeholders involved, including the transition of Chris Toth from his executive roles.
Executive/Board Changes
Baxter International Announces New Chief Accounting Officer
Positive
Jan 31, 2025
Baxter International Inc. has appointed Ms. Anita Zielinski as its Senior Vice President, Chief Accounting Officer, and Controller, effective February 21, 2025. This strategic leadership change is expected to strengthen Baxter’s financial oversight and operational efficiency, as Ms. Zielinski brings extensive experience from her tenure at Sysco Corporation. Her appointment will allow Mr. Joel Grade to concentrate on his role as Executive Vice President and Chief Financial Officer.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.