) is set to report its fourth-quarter 2012 results before the
opening bell on Thursday, Jan 24. Let's see how things are
shaping up prior to the announcement.
In the last quarter, the company did not post any earnings
surprise reflecting indifferent performance by the company.
Factors to Consider this Past Quarter
The news regarding Baxter still remains somewhat mixed. On the
positive side, Baxter's focus on life-sustaining products which
are not commoditized, partly insulate it from an economic
downturn. The company is able to generate recurring revenues, and
consistent cash flow, due to its focus on chronic diseases. Among
other positive factors, Baxter retains a strong product pipeline
with several products in late-stage clinical development.
On the flip side, despite resilience in certain sub-segments,
we are concerned about relative stagnation in sales, a slightly
somber outlook for hospital spending and tightening of
Improved execution has lifted sentiment somewhat toward
Baxter. It is a good bet for value investors willing to wait as
fundamentals improve further.
Our proven model does not conclusively show that Baxter is
likely to beat earnings estimates this quarter. That is because a
stock needs to have both a positive Earnings ESP (Expected
Surprise Prediction) (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not
the case here as you will see below.
Zacks Earnings ESP:
The Most Accurate estimate stands at $1.25, while the
Zacks Consensus Estimate is pegged at $1.26. This comes to a
difference of -0.79%.
Zacks Rank #3 (Hold).
Baxter's Zacks Rank #3 (Hold) lowers the predictive power of ESP.
The Zacks Rank #3 together with negative ESP earnings makes
surprise prediction difficult.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right ingredients to post an earnings
beat this quarter:
), Earnings ESP of 72.73% and Zacks Rank #1 (Strong Buy)
Hill-Rom Holdings, Inc.
), Earnings ESP of 2.27% and Zacks Rank #2 (Buy)
Becton, Dickinson and Company
), Earnings ESP of 3.25% and Zacks Rank #2 (Buy).
BAXTER INTL (BAX): Free Stock Analysis Report
BECTON DICKINSO (BDX): Free Stock Analysis
HILL-ROM HLDGS (HRC): Free Stock Analysis
NUVASIVE INC (NUVA): Free Stock Analysis
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