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.
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?
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.
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
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.
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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