Today we’re going to take a look at the well-established Baxter International Inc. (NYSE:BAX). The company’s stock saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Baxter International’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
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What is Baxter International worth?The stock seems fairly valued at the moment according to my valuation model. It’s trading around 14.97% above my intrinsic value, which means if you buy Baxter International today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $61.43, then there isn’t really any room for the share price grow beyond what it’s currently trading. What’s more, Baxter International’s share price may be more stable over time (relative to the market), as indicated by its low beta.
Can we expect growth from Baxter International?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by 50% over the next couple of years, the future seems bright for Baxter International. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? BAX’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on BAX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Baxter International. You can find everything you need to know about Baxter International in the latest infographic research report. If you are no longer interested in Baxter International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.