Here's Why You Should Hold Onto Baxter (BAX) Stock For Now

Zacks Investment Research | Mar 18, 2020 09:50PM ET

Baxter International, Inc. (NYSE:BAX) is likely to gain from strong fourth-quarter results while its Other unit has been weak of late.

Shares of this company have rallied 9.6% compared with the industry ’s 23.6% drop in a year’s time. The current level also compares unfavorably with the S&P 500 index’s 5.2% decline.

This $41.10-billion medical technology company currently has a Zacks Rank #3 (Hold). Baxter’s earnings are expected to grow 11.5% in the next five years. Also, the company has a trailing four-quarter positive earnings surprise of 10.6%, on average.

Let’s take a closer look at the factors that are working in favor of the company right now.

Strong Q4 Show

Baxter came up with fourth-quarter 2019 adjusted earnings per share (EPS) of 97 cents, which surpassed the Zacks Consensus Estimate of 88 cents by 10.2%. The bottom line also improved 36.6% from the year-ago quarter.

Meanwhile, revenues worth $3.04 billion matched the consensus mark and improved 7.3% year over year on a reported basis.

Notably, the strong show was backed by solid growth across the segments -- Renal Care, Medication Delivery, Pharmaceuticals, Clinical Nutrition, Advanced Surgery and Acute Therapies.

Notably, revenues across all segments rose year over year in the quarter.

Reflective of these, Baxter issued a strong guidance for the first quarter of 2020.

The company anticipates sales growth in the range of 4-5% on a reported basis, and 5-6% on both cc and operational basis.

Adjusted EPS are projected in the range of 72-74 cents.

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Baxter International Inc. Price and Consensus

Zacks Investment Research

Written By: Zacks Investment Research

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