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1. Company Snapshot

1.a. Company Description

Baxter International Inc., through its subsidiaries, develops and provides a portfolio of healthcare products worldwide.The company offers peritoneal dialysis and hemodialysis, and additional dialysis therapies and services; intravenous therapies, infusion pumps, administration sets, and drug reconstitution devices; remixed and oncology drug platforms, inhaled anesthesia and critical care products and pharmacy compounding services; parenteral nutrition therapies and related products; biological products and medical devices used in surgical procedures for hemostasis, tissue sealing and adhesion prevention; and continuous renal replacement therapies and other organ support therapies focused in the intensive care unit.It also provides connected care solutions, including devices, software, communications, and integration technologies; integrated patient monitoring and diagnostic technologies to help diagnose, treat, and manage a various illness and diseases, including respiratory therapy, cardiology, vision screening, and physical assessment; surgical video technologies, tables, lights, pendants, precision positioning devices and other accessories.


In addition, the company offers contracted services to various pharmaceutical and biopharmaceutical companies.Its products are used in hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors' offices, and patients at home under physician supervision.The company sells its products through direct sales force, as well as through independent distributors, drug wholesalers, and specialty pharmacy or other alternate site providers in approximately 100 countries.


It has an agreement with Celerity Pharmaceutical, LLC to develop acute care generic injectable premix and oncolytic molecules.Baxter International Inc.was incorporated in 1931 and is headquartered in Deerfield, Illinois.

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1.b. Last Insights on BAX

Baxter International Inc.'s recent performance was negatively impacted by a sales miss and lowered 2025 EPS guidance. The company's Q3 earnings beat forecasts, but revenue lagged. A failed Hill-Rom acquisition and operational missteps have contributed to the stock's decline. A class action lawsuit has been filed against the company for alleged securities fraud. New CEO Andrew Hider is expected to focus on deleveraging and operational improvement. The company's shipping pauses have also triggered a securities fraud class action lawsuit.

1.c. Company Highlights

2. Baxter International's Q3 2025 Earnings: A Mixed Bag

Baxter International's third-quarter 2025 financial performance was marked by a mixed bag of results, with global sales from continuing operations totaling $2.8 billion, representing a 5% increase on a reported basis and 2% on an operational basis. Adjusted earnings from continuing operations were $0.69 per share, beating estimates of $0.6. The operating margin on a continuing operations basis was 14.9%, improving 40 basis points compared to the prior year period. However, adjusted gross margins from continuing operations were 39.4%, a decrease of 430 basis points compared to the prior year.

Publication Date: Nov -08

📋 Highlights
  • CEO Strategic Focus: Emphasized stabilizing the business, strengthening the balance sheet, and driving continuous improvement, with a focus on resolving Novum IQ LVP issues.
  • Q3 Financial Performance: Top-line sales rose 5% ($2.8B), but adjusted EPS surged 41% to $0.69 due to a 5.1% tax rate and cost efficiencies.
  • Segment Performance: Healthcare Systems & Technologies grew 2% ($773M), Pharmaceuticals rose 7% ($632M), while Medical Products & Therapies declined 1% ($1.3B).
  • Dividend Cut: Quarterly dividend slashed to $0.01/share (from ~$0.35), freeing $300M annually for deleveraging, targeting 3x net leverage by 2026.

Segment Performance

The company's segment performance was varied, with the Medical Products & Therapies segment declining 1% to $1.3 billion, while the Healthcare Systems & Technologies segment increased 2% to $773 million, and the Pharmaceuticals segment grew 7% to $632 million. The improved performance in Healthcare Systems & Technologies was a positive note, driven by the launch of new products, including Connex 360 in its FLC business, which has seen strong customer excitement.

Challenges and Initiatives

Baxter faced challenges in its Infusion Therapies and Technologies, and Injectables and Anesthesia divisions, partly due to the pause on deliveries and installations of the Novum IQ Large Volume pump. To address this, the company is working to evaluate and test potential corrections to fully resolve the flow rate issues. The new CEO, Andrew Hider, aims to stabilize areas of the business, strengthen the balance sheet, and drive a culture of continuous improvement through the Baxter GPS growth and performance system.

Valuation and Outlook

With a P/E Ratio of -27.13 and an EV/EBITDA of 21.82, the market is pricing in significant expectations for the company's future growth. Analysts estimate next year's revenue growth at 2.0%. The company's decision to reduce the quarterly dividend to $0.01 per share will free up over $300 million in annual cash flow, prioritizing deleveraging and aiming to achieve its 3x net leverage target by the end of 2026. The current valuation metrics suggest that the market is cautiously optimistic about Baxter's prospects, and the company's initiatives to improve its balance sheet and drive growth will be crucial in meeting these expectations.

3. NewsRoom

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Bragar Eagel & Squire, P.C. Urges DexCom and Wildermuth Investors to Contact the Firm Regarding Their Rights Before Upcoming Deadlines

Dec -04

Source: globenewswire.com

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Levi & Korsinsky Notifies Baxter International, Inc. Investors of a Class Action Lawsuit and Upcoming Deadline – BAX

Dec -04

Source: globenewswire.com

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Baxter Announces Pricing of Tender Offers for 2.600% Senior Notes Due 2026 and 1.915% Senior Notes Due 2027

Dec -04

Source: businesswire.com

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INVESTIGATION ALERT: Berger Montague PC Investigates Baxter International Inc.'s Board Of Directors For Breach of Fiduciary Duties (NYSE: BAX)

Dec -04

Source: globenewswire.com

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BAX Investors Have Opportunity to Lead Baxter International Inc. Securities Fraud Lawsuit with the Schall Law Firm

Dec -04

Source: globenewswire.com

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The Gross Law Firm Notifies Shareholders of Baxter International, Inc.(BAX) of a Class Action Lawsuit and an Upcoming Deadline

Dec -04

Source: prnewswire.com

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Baxter Announces Early Tender Results for 2.600% Senior Notes Due 2026 and 1.915% Senior Notes Due 2027

Dec -04

Source: businesswire.com

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The Gross Law Firm Notifies Baxter International, Inc. Investors of a Class Action Lawsuit and Upcoming Deadline – BAX

Dec -03

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.07%)

6. Segments

Medical Products and Therapies

Expected Growth: 2.5%

Baxter International Inc.'s Medical Products and Therapies segment growth of 2.5% is driven by increasing demand for hospital-based products, such as IV solutions and injectables, as well as growth in renal care and pharmaceutical partnering services. Additionally, the company's focus on innovation, geographic expansion, and strategic acquisitions also contribute to the segment's growth.

Kidney Care

Expected Growth: 1.8%

Baxter's Kidney Care segment growth of 1.8% is driven by increasing prevalence of chronic kidney disease, aging population, and rising demand for home dialysis. Additionally, Baxter's innovative products such as AMIA automated peritoneal dialysis system and SHARESOURCE remote patient management platform contribute to the growth.

Healthcare Systems and Technologies

Expected Growth: 2.2%

Baxter International Inc.'s Healthcare Systems and Technologies segment growth of 2.2% is driven by increasing demand for hospital equipment and supplies, advancements in medical technologies, and growing need for cost-effective healthcare solutions. Additionally, the company's focus on innovation, strategic acquisitions, and expansion into emerging markets also contribute to its growth.

Pharmaceuticals

Expected Growth: 1.5%

Baxter International Inc.'s pharmaceutical segment growth of 1.5% is driven by increasing demand for chronic disease treatments, expansion into emerging markets, and strategic product launches. Additionally, the company's focus on R&D investments and partnerships to develop innovative therapies also contribute to growth.

Other

Expected Growth: 1.2%

Baxter International's 1.2% growth in 'Other' segment is driven by increasing demand for medical devices, expansion into emerging markets, and strategic partnerships. Additionally, the company's focus on innovation, cost savings initiatives, and effective supply chain management have contributed to this growth.

7. Detailed Products

Renal Care Products

Baxter's Renal Care products provide dialysis and other treatments for patients with kidney disease.

Acute Therapies

Baxter's Acute Therapies products provide critical care solutions for patients in intensive care units.

Nutrition Products

Baxter's Nutrition products provide intravenous nutrition solutions for patients who require parenteral nutrition.

Pharmaceuticals

Baxter's Pharmaceuticals products provide a range of injectable medications for various therapeutic areas.

Surgical Care Products

Baxter's Surgical Care products provide surgical instruments and supplies for a range of surgical procedures.

BioSurgery Products

Baxter's BioSurgery products provide biological and synthetic products for surgical procedures.

Advanced Surgery Products

Baxter's Advanced Surgery products provide innovative solutions for minimally invasive and robotic-assisted surgeries.

8. Baxter International Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Baxter International Inc. operates in the healthcare industry, where substitutes are limited. However, the company faces some threat from alternative medical devices and equipment.

Bargaining Power Of Customers

Baxter International Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products are often critical to patient care, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Baxter International Inc. relies on a network of suppliers for raw materials and components. While the company has some bargaining power due to its size, suppliers may still have some leverage, particularly if they provide specialized or high-quality materials.

Threat Of New Entrants

The healthcare industry has high barriers to entry, including regulatory hurdles and significant capital requirements. This makes it difficult for new entrants to compete with established companies like Baxter International Inc.

Intensity Of Rivalry

The healthcare industry is highly competitive, with many established companies competing for market share. Baxter International Inc. faces intense competition from companies like Fresenius Medical Care, DaVita, and others.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 62.26%
Debt Cost 5.32%
Equity Weight 37.74%
Equity Cost 6.85%
WACC 5.90%
Leverage 164.96%

11. Quality Control: Baxter International Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
AptarGroup

A-Score: 4.8/10

Value: 4.0

Growth: 5.1

Quality: 5.8

Yield: 3.0

Momentum: 1.5

Volatility: 9.3

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Merit Medical Systems

A-Score: 4.4/10

Value: 2.6

Growth: 7.3

Quality: 6.5

Yield: 0.0

Momentum: 2.5

Volatility: 7.7

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Hologic

A-Score: 4.3/10

Value: 2.9

Growth: 5.8

Quality: 7.1

Yield: 0.0

Momentum: 1.5

Volatility: 8.3

1-Year Total Return ->

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West Pharma

A-Score: 3.8/10

Value: 0.9

Growth: 6.2

Quality: 7.4

Yield: 0.0

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

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Teleflex

A-Score: 3.6/10

Value: 4.7

Growth: 3.4

Quality: 5.4

Yield: 1.0

Momentum: 0.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Baxter

A-Score: 3.2/10

Value: 4.9

Growth: 1.7

Quality: 2.3

Yield: 5.0

Momentum: 0.5

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

18.54$

Current Price

18.54$

Potential

-0.00%

Expected Cash-Flows