Baxter Expects to Grow on Acquisitions and Product Lineups - Analyst Blog

By
A A A

On Sep 2, we have updated our research report on Baxter International Inc. ( BAX ). Although expensive, the Gambro acquisition has long term prospects for Baxter. Further, a solid product pipeline and strategic collaborations, represents key value drivers for the company.

Baxter operates in the life-sustaining and critical care products category that should remain relatively insulated from economic downturns. Its products are not commodity-like in nature and provide a recurring revenue stream.

The Gambro acquisition strengthens the company's role in the hemodialysis market. It will be able to serve both acute and chronic dialysis patients. With the takeover, Baxter gains an established set of products, which strengthen its existing line of dialysis products.


Apart from Gambro, Baxter made two acquisitions in the recent past, which are expected to boost its Medical Products segment results. They include Chapel Hill, NC-based gene therapy-mediated cures developer Chatham Therapeutics, LLC and privately-owned orphan drug (pharmaceutical drug used for treating rare disease) producer in the U.S. AesRx, LLC that will help it address a highly unmet clinical need of patients suffering from blood-related disorders.

However, Baxter depends on the EU for about a third of its sales. This is a cause for concern given recent fiscal tightening, a glum outlook for hospital spending and tightening of reimbursement.

Further, Baxter faces pricing pressure due to the advent of group purchasing organizations (GPOs) in the U.S. GPOs act as agents that negotiate vendor contracts on behalf of their members.

Currently, Baxter carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical products industry include ICU Medical, Inc. ( ICUI ), Neogen Corp. ( NEOG ), and NuVasive, Inc. ( NUVA ). ICU Medical sports a Zacks Rank #1 (Strong Buy), while both Neogen and NuVasive carry a Zacks Rank #2 (Buy).


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

BAXTER INTL (BAX): Free Stock Analysis Report

NUVASIVE INC (NUVA): Free Stock Analysis Report

ICU MEDICAL INC (ICUI): Free Stock Analysis Report

NEOGEN CORP (NEOG): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Stocks

Referenced Stocks: BAX , NUVA , ICUI , NEOG

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

92,579,562
  • $10.49 ▲ 2.94%
54,754,323
  • $16.295 ▼ 0.88%
51,543,792
  • $29.70 ▲ 6.34%
40,509,235
  • $112.63 ▼ 0.26%
40,503,310
  • $2.415 ▲ 5.92%
38,725,915
  • $5.77 ▲ 0.70%
35,971,950
  • $105.42 ▼ 0.21%
32,567,287
  • $9.37 ▲ 5.76%
As of 8/28/2015, 03:10 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com