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Baxter (BAX): Portfolio Strong, Cyclophosphamide Sales Low


Trades from $3

On Oct 6, we issued an updated research report on Deerfield, IL-based Baxter International, Inc. (BAX - Analyst Report) , a leading provider of renal and hospital products and services across the globe. The company currently carries a Zacks Rank #3 (Hold).

Baxter is gaining ground on a series of notable developments which include the recent tie-up with Satellite Healthcare (the sixth-largest provider of kidney disease services in the U.S) and the recognition of its Sigma spectrum infusion system as a highly efficient infusion pump in drug library compliance (analysis by KLAS research firm).

Another notable development for the company is the recent launch of NUMETA G13E in Europe. Notably, this is a ready-to-use parenteral nutrition (PN) product which treats preterm infants (less than 37 weeks gestation age) suffering from infection and malnutrition. Exclusive products like these strengthen the company’s portfolio which comprises of offerings like ACTIFUSE, PERI-STRIPS, HEMOPATCH and the PRISMAFLEX platform – which recently got approved in China.

On the flipside, lower cyclophosphamide sales are expected to mar the company’s prospects, especially the Integrated Pharmacy Solutions franchise segment. Notably, management expects sales in this segment to decline in the low single-digits in full-year 2016.

Although Baxter operates in the life-sustaining and critical care products category that is relatively cushioned against economic downturns, we believe cutthroat competition in the medical products segment and unimpressive hospital spending environment are major concerns.

Sector Picks

Better-ranked stocks in the broader medical sector are Abiomed Inc. (ABMD - Analyst Report) , Cardio Vascular Systems Inc. (CSII - Analyst Report) and Cepheid Inc. (CPHD - Analyst Report) . All the companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Abiomed posted positive earnings surprise in the last four quarters, the average being approximately 35%. The company represents an impressive year-to-date return of 42.3%.

Cardio Vascular Systems projects impressive longterm earnings growth of 22.5%. The company also represents a solid year-to-date return of 59.4%.

Cepheid posted positive earnings surprise in the last four quarters, the average being approximately 38.5%. The company posted a solid year-to-date return of 44.1%.

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