Update shared on 01 Dec 2025
Analysts have lowered their price target for Baxter International from $25 to $22. They cite weaker-than-expected sales, margin pressures, continued business headwinds, and reduced forward guidance as key factors behind the adjustment.
Analyst Commentary
Recent analyst reports highlight several key factors shaping sentiment around Baxter International following its third quarter results and updated outlook.
Bullish Takeaways- Cost controls, particularly reduced spending in research and development as well as selling, general, and administrative expenses, have helped partially offset margin pressures. This signals management’s focus on operational efficiency.
- Despite downward guidance, organic revenue growth and earnings per share are still expected to show moderate improvement in 2025. This reflects a degree of underlying business stability.
- The company’s recent leadership transition introduces potential for strategic realignment, which could positively impact future execution and growth trajectory.
- Total sales missed both company guidance and consensus expectations, with shortfalls seen across all business segments. This indicates broader top-line weakness.
- Gross margins saw a sharp decline, mainly due to ongoing manufacturing variances expected to persist through early 2026. This raises concerns over ongoing profitability challenges.
- Analysts note that near-term visibility is limited and anticipate continued business headwinds into 2026. Updated guidance suggests revenue softness and only gradual improvement, weighing on valuation outlook.
- The reduction in forward guidance and cautious commentary about sustained pressures underscore the risk that earnings headwinds could outweigh any forthcoming tailwinds through next year.
What's in the News
- Baxter International announced a quarterly cash dividend of $0.01 per share, resulting in an annual dividend rate of $0.04 per share. The dividend is payable January 2, 2026, to stockholders of record as of November 28, 2025. (Key Developments)
- The company completed its share repurchase program, having repurchased over 103 million shares. This represents approximately 19.57% of outstanding shares for $7.22 billion. (Key Developments)
- A securities class action lawsuit was filed against Baxter and certain executives, alleging that investors were misled about serious safety issues with the Novum LVP medical device. The lawsuit follows a 22.4 percent drop in Baxter's stock price after the pause of shipments and installations. (Key Developments)
- Baxter provided updated sales guidance and now expects 2025 full-year sales growth from continuing operations of 4% to 5% on a reported basis and 1% to 2% on an operational basis. (Key Developments)
- The company launched the Welch Allyn Connex 360 Vital Signs Monitor, which features enhanced security, an intuitive interface, and customizable protocols, after receiving U.S. FDA 510(k) clearance. (Key Developments)
Valuation Changes
- Fair Value: Remained unchanged at $24.07 per share.
- Discount Rate: Increased slightly from 10.00% to 10.02%.
- Revenue Growth: Held steady at 1.75%.
- Net Profit Margin: Decreased modestly from 6.57% to 6.25%.
- Future P/E: Rose from 21.89x to 22.99x.
Disclaimer
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