Update shared on05 Oct 2025
Fair value Increased 1.61%Analysts have lowered their price targets for Baxter International to $25 from previous levels above $36, citing concerns about slower than expected margin expansion, delayed sales growth recovery, and business challenges highlighted in recent guidance cuts.
Analyst Commentary
Recent analyst reports have provided a mixed outlook for Baxter International, highlighting both challenges and potential positives as the company navigates through a period of transition and recovery.
Bullish Takeaways
- Bullish analysts acknowledge that Baxter’s portfolio transformation initiatives may help realign the business and create long-term value, even though there are near-term execution hurdles.
- There is cautious optimism that new leadership under the incoming CEO could bring renewed focus to navigating business challenges and setting a clearer path for recovery.
- Deleveraging efforts following recent divestitures are expected to strengthen the balance sheet and may improve financial flexibility over time.
Bearish Takeaways
- Bearish analysts highlight slowed margin expansion and the postponement of anticipated sales growth, which have contributed to lowered price targets and reduced ratings.
- Full-year guidance cuts and underwhelming quarterly performance suggest that achieving consistent mid-single-digit sales growth may take longer than previously expected.
- Ongoing business challenges, including delayed recovery in key segments and continued inflationary pressures, are viewed as risks to near-term profitability and valuation.
- There is skepticism that margin improvement will materialize at a meaningful pace in the near future, leading to more conservative outlooks among analysts.
What's in the News
- Stifel downgraded Baxter International to Hold from Buy with a new price target of $25, citing weaker Q2 results and a lower 2026 outlook. The firm indicated that progress toward consistent growth will take longer than expected (Stifel analyst note).
- Baxter launched the Welch Allyn Connex 360 Vital Signs Monitor, expanding its connected monitoring offerings with advanced features such as enhanced security, customizable configurations, and streamlined upgrades (Product Announcement).
- The company introduced the new Hemopatch sealing hemostat, a collagen pad designed for hemostasis and sealing in surgical procedures. This product was developed through a decade-long collaboration with clinicians (Product Announcement).
- Andrew Hider was named the new CEO of Baxter International, with leadership set to transition no later than September 3, 2025 (Executive Change).
Valuation Changes
- Fair Value has remained stable near $29, with only a marginal increase to approximately $29.47.
- Discount Rate has risen slightly from 9.10% to 9.11%, reflecting a minor reassessment of risk.
- Revenue Growth expectations have increased modestly, moving from 3.66% to 3.69% annually.
- Net Profit Margin projections have fallen from 7.53% to 6.90%, indicating anticipated pressure on profitability.
- Future P/E ratio has increased from 21.5x to 23.8x, suggesting higher valuation multiples in response to expected earnings changes.
Disclaimer
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