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Baxter (BAX): Sluggish Macro Environment Mars Prospects
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On Jan 17, we issued an updated research report on Deerfield, IL-based Baxter International Inc. (BAX - Free Report) , a global medical technology company and leading provider of renal and hospital products. An unfavorable estimate revision trend for the next year is a dampener for the stock at the moment. The stock currently carries a Zacks Rank #4 (Sell).
A glimpse at the recent price performance of the stock reveals a negative return of 2.7% over the past three months, compared with the Zacks classified Medical Product sub-industry’s decline of almost 3.3%.
Meanwhile, the company’s recent earnings estimates for the next year have been disappointing, with two estimates moving south in the past two months, compared to no movement in the opposite direction. As a result, the consensus estimate for the stock moved down around a modest 1%.
Baxter banks on the European Union for about a third of its sales. In the last reported quarter, the company launched NUMETA G13E in Europe. However, high dependence on the region raises concern, given the sluggish macro-environment, glum outlook for hospital spending and tightening of reimbursement. In fact, revenues at the Surgical Care segment in the last quarter were partially marred by lower anesthesia product sales owing to the austere measures implemented in the space.
Furthermore, the outlook remains bleak for the U.S. where demand for many health care products is soft on expectations of a price cut on account of volatility post election.
Apart from these, lower cyclophosphamide sales pose threat to the Integrated Pharmacy Solutions franchise business of Baxter. In fact, for the coming quarter, deplorable conditions in the cyclophosphamide space are expected to impact the top line by low single digits.
Meanwhile, over the past one year, Baxter outperformed the broader market in terms of price movement. The stock added 31.6%, well ahead of the S&P 500’s 19.5%.
Glaukos Corporation has a long-term expected earnings growth rate of approximately 25%. Notably, the stock represents an impressive one-year return of 137.6%.
ARIAD Pharmaceuticals projects sales growth of 28.9% for the current year. Additionally, the company posted a promising one-year return of almost 348.6%.
Penumbra has a long-term expected earnings growth rate of approximately 20%. Notably, the stock represents an impressive one-year return of 52.7%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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Baxter (BAX): Sluggish Macro Environment Mars Prospects
On Jan 17, we issued an updated research report on Deerfield, IL-based Baxter International Inc. (BAX - Free Report) , a global medical technology company and leading provider of renal and hospital products. An unfavorable estimate revision trend for the next year is a dampener for the stock at the moment. The stock currently carries a Zacks Rank #4 (Sell).
A glimpse at the recent price performance of the stock reveals a negative return of 2.7% over the past three months, compared with the Zacks classified Medical Product sub-industry’s decline of almost 3.3%.
Meanwhile, the company’s recent earnings estimates for the next year have been disappointing, with two estimates moving south in the past two months, compared to no movement in the opposite direction. As a result, the consensus estimate for the stock moved down around a modest 1%.
Baxter banks on the European Union for about a third of its sales. In the last reported quarter, the company launched NUMETA G13E in Europe. However, high dependence on the region raises concern, given the sluggish macro-environment, glum outlook for hospital spending and tightening of reimbursement. In fact, revenues at the Surgical Care segment in the last quarter were partially marred by lower anesthesia product sales owing to the austere measures implemented in the space.
Furthermore, the outlook remains bleak for the U.S. where demand for many health care products is soft on expectations of a price cut on account of volatility post election.
Apart from these, lower cyclophosphamide sales pose threat to the Integrated Pharmacy Solutions franchise business of Baxter. In fact, for the coming quarter, deplorable conditions in the cyclophosphamide space are expected to impact the top line by low single digits.
Meanwhile, over the past one year, Baxter outperformed the broader market in terms of price movement. The stock added 31.6%, well ahead of the S&P 500’s 19.5%.
Stocks to Consider
Better-ranked stocks in the broader medical sector include Addus Glaukos Corporation (GKOS - Free Report) , ARIAD Pharmaceuticals, Inc. and Penumbra Inc. (PEN - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Glaukos Corporation has a long-term expected earnings growth rate of approximately 25%. Notably, the stock represents an impressive one-year return of 137.6%.
ARIAD Pharmaceuticals projects sales growth of 28.9% for the current year. Additionally, the company posted a promising one-year return of almost 348.6%.
Penumbra has a long-term expected earnings growth rate of approximately 20%. Notably, the stock represents an impressive one-year return of 52.7%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>