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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

Breaking News: Baxter International Inc recently drew attention from various research firms, with a consensus rating of Reduce. Three analysts rated the stock as sell, nine as hold, and two as buy. Additionally, Artisan Value Income Fund exited its position in Baxter International during Q4 2025. There is no recent earnings release to comment on. The average recommendation from brokerages suggests caution, with a majority of analysts advising to hold or sell the stock. Sell recommendations come from three research analysts.

1.c. Company Highlights

2. Baxter International's Q4 2025 Earnings: A Mixed Bag

Baxter International's fourth-quarter 2025 financial performance was marked by a revenue growth of 8% on a reported basis and 3% on an operational basis, with global sales from continuing operations reaching $3,000,000,000. However, adjusted earnings per share fell short of expectations, coming in at $0.44 relative to estimates of $0.53. The company's adjusted operating margin decreased by 340 basis points compared to the prior year period, reflecting unfavorable product mix and nonrecurring items. Analysts had estimated a revenue growth of 2.4% for the next year, indicating a potential slowdown.

Publication Date: Feb -19

📋 Highlights
  • Q4 Global Sales:: $3,000,000,000, up 8% reported and 3% operational, but adjusted EPS fell short of expectations.
  • Adjusted Operating Margin:: Declined 340 basis points to 13-14% in 2026 due to unfavorable product mix and nonrecurring items ($40M in Q4).
  • 2026 Sales Guidance:: Flat to 1% growth reported; organic sales flat, with tax rate projected at 18.5-19.5% and SG&A reductions offsetting margin pressures.
  • Segment Performance:: Medical Products/Therapies ($1.4B, +4%), HealthCare Systems ($827M, +4%), Pharmaceuticals ($668M, +2%) driven by Care/Connectivity Solutions.

Segment Performance

Baxter's Medical Products and Therapies segment reported sales of $1,400,000,000, a 4% increase. The HealthCare Systems and Technologies segment reported sales of $827,000,000, a 4% increase. The Pharmaceuticals segment reported sales of $668,000,000, a 2% increase. As Robert Justin Marcus noted, "We believe the market is at a new baseline in our IV Solutions business, with full-year organic sales growth expected to be low single digits in HST, driven by contributions from Care and Connectivity Solutions and Front Line Care divisions."

Guidance and Outlook

For 2026, Baxter expects total sales growth to be flat to 1% on a reported basis, reflecting current foreign exchange rates and a headwind from MSA revenues from Vantiv. Excluding the impact of foreign exchange and MSA revenues, the company expects organic sales growth of approximately flat in 2026. The company's adjusted operating margin from continuing operations is expected to range between 13-14%, primarily reflecting lower gross margins driven by unfavorable product mix and reduced contribution from pricing.

Valuation and Metrics

With a P/E Ratio of -13.03 and an EV/EBITDA of 11.42, the market seems to be pricing in a challenging year for Baxter International. The company's ROE is -12.43%, and the Net Debt / EBITDA ratio stands at 4.68, indicating a significant debt burden. However, the Dividend Yield is 2.38%, providing some support to the stock.

3. NewsRoom

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Artisan Value Income Fund Q4 2025 Portfolio Activity

Feb -17

Source: seekingalpha.com

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Baxter International Inc. (NYSE:BAX) Receives Average Recommendation of “Reduce” from Brokerages

Feb -17

Source: defenseworld.net

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Pale Fire Capital Bets Big on Healthcare With a 2.07 Million Share Baxter International (BAX) Investment

Feb -16

Source: fool.com

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Baxter International: Debt, Margin Pressure, Dreadful FY26 Guidance (Downgrade)

Feb -12

Source: seekingalpha.com

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Baxter International Inc (BAX) Q4 2025 Earnings Call Highlights: Strong Sales Growth Amidst Margin Pressures

Feb -12

Source: gurufocus.com

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Why Baxter International Stock Was Tumbling Today

Feb -12

Source: fool.com

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Baxter International Inc. (BAX) Q4 2025 Earnings Call Transcript

Feb -12

Source: seekingalpha.com

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Baxter Shares Tank As 2026 Profit Guidance Falls Below Expectations

Feb -12

Source: benzinga.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

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Baxter

A-Score: 3.5/10

Value: 7.2

Growth: 1.7

Quality: 1.9

Yield: 5.0

Momentum: 0.5

Volatility: 5.0

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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

21.3$

Current Price

21.3$

Potential

-0.00%

Expected Cash-Flows