Now trading at a price of $34.28, Baxter International has moved -0.6% so far today.
Baxter International returned losses of -34.0% last year, with its stock price reaching a high of $56.92 and a low of $31.01. Over the same period, the stock underperformed the S&P 500 index by -49.0%. As of April 2023, the company's 50-day average price was $36.31. Baxter International Inc., through its subsidiaries, develops and provides a portfolio of healthcare products worldwide. Based in Deerfield, IL, the large-cap Health Care company has 60,000 full time employees. Baxter International has offered a 3.4% dividend yield over the last 12 months.
The Business Is Unprofitable and Its Balance Sheet Is Highly Leveraged:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $11,099 | $11,362 | $11,673 | $12,784 | $15,113 | $15,168 |
| Gross Margins | 43% | 42% | 39% | 40% | 36% | 34% |
| Operating Margins | 15.0% | 16.0% | 14.0% | 13.0% | -13.0% | -15.0% |
| Net Margins | 14.0% | 9.0% | 10.0% | 10.0% | 0.0% | 0.0% |
| Net Income (MM) | $1,552 | $1,011 | $1,110 | $1,295 | $12 | $10 |
| Net Interest Expense (MM) | $78 | -$71 | -$134 | -$41 | -$15 | -$116 |
| Depreciation & Amort. (MM) | $771 | $789 | $823 | $890 | $1,403 | $1,308 |
| Earnings Per Share | $2.83 | $1.93 | $2.13 | $2.53 | -$4.83 | -$5.66 |
| Diluted Shares (MM) | 546 | 519 | 517 | 508 | 504 | 500 |
| Free Cash Flow (MM) | $1,358 | $1,414 | $1,161 | $1,479 | $532 | $829 |
| Capital Expenditures (MM) | $659 | $696 | $709 | $743 | $679 | $730 |
| Net Current Assets (MM) | -$1,895 | -$2,778 | -$2,882 | -$15,528 | -$14,381 | -$14,049 |
| Long Term Debt (MM) | $3,481 | $3,782 | $4,803 | $16,355 | $13,233 | $12,301 |
Baxter International's financial statements include several red flags such as slimmer gross margins than its peers, weak operating margins with a negative growth trend, and declining EPS growth. Additionally, the firm has high levels of debt. On the other hand, the company has growing revenues and a flat capital expenditure trend working in its favor. Furthermore, Baxter International has irregular cash flows.
Baxter International Has an Attractive P/B Ratio but a Worrisome P/E Ratio:
Baxter International has a trailing twelve month P/E ratio of 78.9, compared to an average of 24.45 for the Health Care sector. Based on its EPS guidance of $3.09, the company has a forward P/E ratio of 11.8. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is -14.2%. On this basis, the company's PEG ratio is -5.57, which indicates that its shares are overpriced. In contrast, the market is likely undervaluing Baxter International in terms of its equity because its P/B ratio is 2.15 while the sector average is 4.16.
Baxter International Has an Average Rating of Hold:
The 12 analysts following Baxter International have set target prices ranging from $33.0 to $56.0 per share, for an average of $47.08 with a hold rating. As of April 2023, the company is trading -22.9% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
Baxter International has an average amount of shares sold short because 2.5% of the company's shares are sold short. Institutions own 89.1% of the company's shares, and the insider ownership rate stands at 0.27%, suggesting a small amount of insider investors. The largest shareholder is Blackrock Inc., whose 13% stake in the company is worth $2,234,329,954.
