Technology

Here's Why You Should Invest in Baxter International Now

Baxter International Inc. BAX is expected to benefit from a slew of recent developments and a strong 2019 view.

Price Performance

Over the past year, shares of this Zacks Rank #2 (Buy) company have rallied 22.5% compared with the industry’s 8.1% rise. The current level also compares favorably with the S&P 500 index’s 6.5% rally. Moreover, the company has an interesting earnings surprise history, having outpaced the Zacks Consensus Estimate in all of the trailing four quarters, the average being 9.1%. Notably, this trend of consecutive beats underlines the company’s operating efficiency.

What’s Favoring the Stock?

Solid View

For 2019, Baxter expects growth in the range of 0-1% on a reported basis, 2-3%at constant currency (cc) and 3-4% on an operational basis. Adjusted earnings per share are anticipated in the band of $3.22-$3.30.

For the first quarter of 2019, management at Baxter expects revenues to grow 1% at cc and 1-2% on an operational basis. Adjusted earnings are projected in the range of 66-68 cents per diluted share.

Developments

The company recently announced that its patented olive oil-based lipid injectable emulsion, Clinolipid will be launched later this year, in the United States.

Baxter has also teamed up with bioMérieux, a leader in the field of in vitro diagnostics, to develop biomarkers for prompt identification and treatment of acute kidney injury. (Read More: Baxter's New Tie Up to Boost Acute Therapies Business)

Earlier this month, Baxter announced the FDA approval and launch of its ready-to-use cardiovascular medication platform — Eptifibatide. (Read More: Baxter Gets FDA Approval for Eptifibatide to Treat ACS)

Earlier this year, Baxter announced that its Sharesource remote patient management platform performed more than 5 million home peritoneal dialysis treatments globally. (Read More: Baxter Gains From Sharesource's Global Success Rates)

Baxter International Inc. Price and Consensus

 

Baxter International Inc. Price and Consensus | Baxter International Inc. Quote

Which Way Are Estimates Headed?

For the first quarter, the Zacks Consensus Estimate for earnings is pegged at 68 cents, reflecting a year-over-year decline of 2.9%. The same for revenues is pinned at $2.62 billion, showing a fall of 2.3% year over year.

For 2019, the Zacks Consensus Estimate for revenues is at $11.22 billion, reflecting a rise of 0.8% year over year. The same for earnings stands at $3.27, showing growth of 7.2% year over year.

Bottom Line

Baxter seems to be positioned for growth on strong guidance and positive developments. The company's long-term earnings growth rate of 10% supports our view. This is further validated by Baxter’s Growth Score of B, reflecting possibilities of outperformance over the long haul. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, are better picks than most.

Want More From the Industry?

Other top-ranked stocks from the Medical Products space are Bio-Rad Laboratories BIO, Surmodcs SRDX and Smith & Nephew SNATS SNN. Notably, each of the stocks sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bio-Rad’s long-term earnings are expected to grow 15%.

Surmodics’ long-term earnings are expected to grow by 10%.

Smith & Nephew’s long-term earnings growth rate is projected at 6.5%.

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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.

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