Baxter International Faces Legal Scrutiny: How Do Lawsuits and Device Issues Shape Its Valuation?

Baxter International (NYSE:BAX) is facing heightened attention from investors after a wave of class action lawsuits and legal probes targeting its Novum IQ Large Volume Pump. Allegations center on device safety failures, disclosures, and a recent halt in shipments.

See our latest analysis for Baxter International.

Legal setbacks and leadership changes have cast a long shadow over Baxter International this year. The share price is now down 23.4% year-to-date and the one-year total shareholder return stands at -36.1%. Even though the stock has regained some ground since its sharp July drop, longer-term momentum remains muted. The five-year total shareholder return sits deep in the red at -66.9%.

If you’re keeping an eye on how new leadership and product cycles reshape the sector, it’s a good moment to explore other healthcare stocks using our See the full list for free.

With shares trading at a steep discount to analyst price targets and legal uncertainty still clouding the outlook, investors must ask whether Baxter International is a bargain at these levels or if the market is cautious about its future growth prospects for good reason.

Most Popular Narrative: 19.9% Undervalued

Baxter International’s most widely followed narrative points to a fair value comfortably above its latest closing price. With shares trading materially lower than consensus expectations, the debate focuses on whether the company’s ongoing transformation can deliver the necessary earnings turnaround.

Baxter's strengthened focus on innovation, including new product launches in advanced infusion systems, AI-enabled devices, and compounding, aligns with growing demand for efficient, digitalized, and connected healthcare equipment. This positions the company to capture higher-margin revenue streams and gain market share.

Read the complete narrative.

Want to know why analysts still see upside despite all the headlines? One key ingredient in this narrative is an ambitious profit recovery plan and big margin expansion. The most popular valuation formula is built on bold financial forecasts. Curious how these numbers play out in the real world? The full narrative unpacks the quantitative engine behind that fair value mark.

Result: Fair Value of $28 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, uncertainties around ongoing IV fluid conservation and the suspension of Novum IQ pumps could stall Baxter’s recovery and put pressure on future margins.

Find out about the key risks to this Baxter International narrative.

Build Your Own Baxter International Narrative

If you think the numbers tell a different story or want to dive into the data yourself, you can build your own perspective from scratch in just minutes with our Do it your way.

A great starting point for your Baxter International research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for More Investment Ideas?

Missing out on new trends leaves opportunity on the table. With just one click, you could uncover stocks primed for growth, innovation, and yield.

• Accelerate your search for future disruptors by jumping straight into these 26 AI penny stocks. Here, tomorrow’s biggest breakthroughs are emerging now.
• Capture consistent monthly income by scanning these 21 dividend stocks with yields > 3% for companies offering attractive yields and stable financials.
• Position yourself ahead of hidden market shifts when you check out these 81 cryptocurrency and blockchain stocks, which spotlights key movers in cryptocurrency and blockchain technology.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com