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Baxter: A Strong Buy on FDA Approvals, Portfolio Strength

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On Oct 2, Zacks Investment Research raised Baxter International Inc. BAX to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Baxter's expanding product portfolio, completion of the Baxalta spin-off, cost synergies from the Gambro acquisition and new partnerships are the primary reasons behind the upgrade. Further, we view Baxter's recent settlement with top institutional shareholder Third Point LLC as a major positive for the company.

Post the Baxalta separation, Baxter is looking to restructure its medical devices business in order to gain market share. In such a scenario, a clash with its top shareholder would not have been appropriate for the company.

Meanwhile, Baxter continues to expand its product portfolio with the recent FDA approval of CEFAZOLIN Injection. The company expects to roll out the injection's 2 gram frozen premix in its GALAXY container in the U.S. in the fourth quarter of 2015.

For the rest of the year, Baxter is expected to significantly benefit from the product approvals it has received year-to-date. The CE mark for HOMECHOICE CLARIA - its automated peritoneal dialysis (APD) system integrated with the SHARESOURCE web-based connectivity platform -- is one of such products.

Baxter also filed 510(K) with the FDA for AMIA with SHARESOURCE - its next generation peritoneal dialysis cycler - in the second quarter of 2015. The company also launched its next-generation SIGMA SPECTRUM infusion pump in the U.S., Puerto Rico and Canada.

FDA also accepted Baxter's Investigational Device Exemption (IDE) for VIVIA, a home-based hemodialysis (HD) system. This opens up significant scope for Baxter to initiate its final U.S. study on VIVIA.

Estimate Revisions

The Zacks Consensus Estimate for fiscal 2015 is currently pegged at $1.28 per share, which moved up 2.4% (3 cents) over the last 60 days. Over the same time frame, the Zacks Consensus Estimate for 2016 has been revised upward by a penny to the present $1.42 per share.

Other Stocks to Consider

One may also consider favorably ranked stocks like OraSure Technologies OSUR , LeMaitre Vascular LMAT and ICU Medical ICUI . All the stocks carry the same Zacks Rank as Baxter.

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BAXTER INTL (BAX): Free Stock Analysis Report

ORASURE TECH (OSUR): Free Stock Analysis Report

ICU MEDICAL INC (ICUI): Free Stock Analysis Report

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


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

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