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Here's Why You Should Retain Baxter (BAX) Stock For Now
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Baxter International Inc. (BAX - Free Report) is well poised for growth in the coming quarters, backed by a strong product portfolio. A robust third-quarter 2021 performance, along with the company’s acute therapies profile, is expected to contribute further. However, stiff competition and a sluggish macroeconomic environment are worrying.
Over the past year, this Zacks Rank #3 (Hold) stock has gained 1.7% against 5.6% fall of the industry it belongs to. The S&P 500 composite rose 23% in the said time frame.
The renowned global medical technology company has a market capitalization of $39.68 billion. The company projects 9.5% growth for the next five years and expects to maintain its strong performance. It has delivered an earnings surprise of 10.16% for the past four quarters, on average.
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Let’s delve deeper.
Acute Therapies Profile: We are optimistic about Baxter’s performance in acute therapies, which has been driven by improving utilization for continuous renal replacement globally, and increased demand for multi-organ support products. In acute therapies, Baxter launched the first three-in-one oXIRIS set for continuous renal replacement therapy and sepsis management protocols. This adds to Baxter's multi-organ therapy offering, utilizing the Prismaflex system. PrisMax is available in intensive care units in more than 20 countries across Europe and Asia-Pacific. In third-quarter 2021, revenues in Acute Therapies business reflected strong growth.
Strong Product Portfolio: We are upbeat about Baxter’s impressive product portfolio with improved existing products and new product development. Management has announced plans of introducing new therapies and products, which are expected to further contribute to sales by 2023. Baxter’s product pipeline comprises the addition of generic injectables and the next generation of its premix technology, among other notable mentions.
Strong Q3 Results: Baxter’s solid third-quarter 2021 results buoy optimism. The company witnessed strong performance across all of its business units. Growth in Americas, EMEA and APAC is encouraging. Expansion in both gross and operating margins fuels further optimism. Regulatory approvals, product launches and buyouts are primary highlights.
Downsides
Sluggish Macroeconomic Environment: Baxter depends on the European Union for about a third of its sales. This is a cause for concern, given the sluggish macroeconomic environment, a glum outlook for hospital spending and tightening of reimbursement. The outlook also remains slightly uneasy in the United States, where demand for many health care products is soft, with an expectation of further price cuts on account of health care reforms.
Stiff Competition: Increase in the prevalence of renal diseases and a considerable diabetic and obese population are responsible for the growth of the renal dialysis market in North America, Europe and Asia Pacific. Stiff competition in the Renal Care Market is likely to dent Baxter’s margins. The company faces aggressive rivalry from several MedTech behemoths.
Estimate Trend
Baxter is witnessing a positive estimate revision trend for 2021. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 1.7% north to $3.59.
The Zacks Consensus Estimate for the company’s fourth-quarter 2021 revenues is pegged at $3.29 billion, suggesting a 3.5% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Chemed Corporation (CHE - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and AMN Healthcare Services (AMN - Free Report) .
Chemed, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted earnings per share (EPS) of $5.06, which beat the Zacks Consensus Estimate by 13.5%. Revenues of $538.7 million outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chemed has an estimated long-term growth rate of 7.7%. The company surpassed estimates in the trailing four quarters, the average surprise being 5.59%.
Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently carries a Zacks Rank #2.
Thermo Fisher has an estimated long-term growth rate of 14%. The company surpassed estimates in the trailing four quarters, the average surprise being 9.02%.
AMN Healthcare reported third-quarter 2021 adjusted EPS of $1.73, which surpassed the Zacks Consensus Estimate by 29.1%. Third-quarter revenues of $877.8 million outpaced the Zacks Consensus Estimate by 12.3%. It currently sports a Zacks Rank #1.
AMN Healthcare has an estimated long-term growth rate of 16.2%. The company surpassed estimates in the trailing four quarters, the average surprise being 19.51%.
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Here's Why You Should Retain Baxter (BAX) Stock For Now
Baxter International Inc. (BAX - Free Report) is well poised for growth in the coming quarters, backed by a strong product portfolio. A robust third-quarter 2021 performance, along with the company’s acute therapies profile, is expected to contribute further. However, stiff competition and a sluggish macroeconomic environment are worrying.
Over the past year, this Zacks Rank #3 (Hold) stock has gained 1.7% against 5.6% fall of the industry it belongs to. The S&P 500 composite rose 23% in the said time frame.
The renowned global medical technology company has a market capitalization of $39.68 billion. The company projects 9.5% growth for the next five years and expects to maintain its strong performance. It has delivered an earnings surprise of 10.16% for the past four quarters, on average.
Let’s delve deeper.
Acute Therapies Profile: We are optimistic about Baxter’s performance in acute therapies, which has been driven by improving utilization for continuous renal replacement globally, and increased demand for multi-organ support products. In acute therapies, Baxter launched the first three-in-one oXIRIS set for continuous renal replacement therapy and sepsis management protocols. This adds to Baxter's multi-organ therapy offering, utilizing the Prismaflex system. PrisMax is available in intensive care units in more than 20 countries across Europe and Asia-Pacific. In third-quarter 2021, revenues in Acute Therapies business reflected strong growth.
Strong Product Portfolio: We are upbeat about Baxter’s impressive product portfolio with improved existing products and new product development. Management has announced plans of introducing new therapies and products, which are expected to further contribute to sales by 2023. Baxter’s product pipeline comprises the addition of generic injectables and the next generation of its premix technology, among other notable mentions.
Strong Q3 Results: Baxter’s solid third-quarter 2021 results buoy optimism. The company witnessed strong performance across all of its business units. Growth in Americas, EMEA and APAC is encouraging. Expansion in both gross and operating margins fuels further optimism. Regulatory approvals, product launches and buyouts are primary highlights.
Downsides
Sluggish Macroeconomic Environment: Baxter depends on the European Union for about a third of its sales. This is a cause for concern, given the sluggish macroeconomic environment, a glum outlook for hospital spending and tightening of reimbursement. The outlook also remains slightly uneasy in the United States, where demand for many health care products is soft, with an expectation of further price cuts on account of health care reforms.
Stiff Competition: Increase in the prevalence of renal diseases and a considerable diabetic and obese population are responsible for the growth of the renal dialysis market in North America, Europe and Asia Pacific. Stiff competition in the Renal Care Market is likely to dent Baxter’s margins. The company faces aggressive rivalry from several MedTech behemoths.
Estimate Trend
Baxter is witnessing a positive estimate revision trend for 2021. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 1.7% north to $3.59.
The Zacks Consensus Estimate for the company’s fourth-quarter 2021 revenues is pegged at $3.29 billion, suggesting a 3.5% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Chemed Corporation (CHE - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and AMN Healthcare Services (AMN - Free Report) .
Chemed, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted earnings per share (EPS) of $5.06, which beat the Zacks Consensus Estimate by 13.5%. Revenues of $538.7 million outpaced the consensus mark by 1.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chemed has an estimated long-term growth rate of 7.7%. The company surpassed estimates in the trailing four quarters, the average surprise being 5.59%.
Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently carries a Zacks Rank #2.
Thermo Fisher has an estimated long-term growth rate of 14%. The company surpassed estimates in the trailing four quarters, the average surprise being 9.02%.
AMN Healthcare reported third-quarter 2021 adjusted EPS of $1.73, which surpassed the Zacks Consensus Estimate by 29.1%. Third-quarter revenues of $877.8 million outpaced the Zacks Consensus Estimate by 12.3%. It currently sports a Zacks Rank #1.
AMN Healthcare has an estimated long-term growth rate of 16.2%. The company surpassed estimates in the trailing four quarters, the average surprise being 19.51%.