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5 Reasons Why You Should Buy Baxter (BAX) Stock Right Now

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Baxter International Inc. (BAX - Free Report) is currently one of the top-performing stocks in the MedTech space. Improvement in price performance and strong fundamentals reflect the stock’s bullish run. Therefore, if you haven’t taken advantage of the share price appreciation yet, it’s time you add the stock to your portfolio.

The company has performed impressively in 2017 and has the potential to carry the momentum in the upcoming period. A long-term expected earnings growth rate of 12.3% is a positive.

Why an Attractive Pick?

Share Price Appreciation

A glimpse of the company’s price trend reveals that the stock has had an impressive run on the bourse year to date. Baxter returned a whopping 47.1%, which compared favorably with the S&P 500 index’s rally of 22.7%. The current return is also greater than the industry’s gain of 22.5%.

Northward Estimate Revisions

Nine estimates for the current year moved north over the past 60 days versus no southward revisions, reflecting analysts’ optimism in the company. During the same period, the Zacks Consensus Estimate for adjusted earnings increased 1.7% for the current year. The positive trend signifies analyst’s bullish sentiment. The company holds a Zacks Rank #2 (Buy), which indicates robust fundamentals and expectations of outperformance in the near term.

Strong Growth Prospects

The company’s Zacks Consensus Estimate of earnings of $2.43 for 2017 reflects year-over-year growth of 23.9%. Moreover, earnings are expected to register 11.6% growth in 2018.

The Zacks Consensus Estimate for 2017 revenues of $10.55 billion reflects year-on-year improvement of 3.8%. Moreover, revenues are expected to witness 4.9% growth in 2018.

Baxter estimates sales growth of approximately 4% on a compounded annual basis from 2016 to 2020. Notably, adjusted operating margin in full-year 2020 is expected to be approximately 20% of revenues, up from the previous guidance of 17% to 18%. Baxter expects full-year 2020 adjusted diluted earnings in the band of $3.25-$3.40 per share.

 

 

Positive Earnings Surprise History

Baxter has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in the trailing four quarters, delivering a positive average earnings surprise of 10.6%.

Developments

The year 2017 has been a favorable one for Baxter on the regulatory front. Recently, management confirmed that the FDA has granted two new approvals for temporary importation of certain drugs from the facilities in Canada and Mexico. With this development, Baxter has four operational sites approved to help address demand in the U.S. markets. Further, the FDA approval of new premixed injectables is a key catalyst.

Baxter launched the oXIRIS set for continuous renal replacement therapy (CRRT) and sepsis management protocols in select markets of Europe, Middle East and Africa recently. Further, the recent launch of DeviceVue, a comprehensive asset tracking solution available exclusively to hospitals, bolsters the company’s product portfolio.

The company operates in the life-sustaining and critical care products category that is cushioned against economic downturns. Baxter’s products are not commodity-like in nature and provide a strong recurring revenue base.

Baxter has been experiencing burgeoning demand for dialyzers across the globe as more people are inflicted by end-stage renal disease (ESRD) due to growing incidence of diabetes, blood pressure and other kidney-related diseases.

Other Picks

Other top-ranked stocks in the broader medical sector are PetMed Express (PETS - Free Report) , Luminex Corporation and IDEXX Laboratories (IDXX - Free Report) .

PetMed Express flaunts a Zacks Rank #1 (Strong Buy). The company has a long-term expected earnings growth rate of 10%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Luminex has a long-term expected earnings growth rate of 16.3%. The stock flaunts a Zacks Rank #1.

IDEXX Laboratories has a long-term expected earnings growth rate of 20.4%. The stock carries a Zacks Rank #2.

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