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Here's Why You Should Invest in Baxter International Now

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Baxter International Inc. (BAX - Free Report) has been on a healthy growth trajectory, of late. Positive tidings on the regulatory front and strategic acquisitions have been providing the company with a competitive edge in MedTech. With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick at the moment.

Baxter International has outperformed the industry in the past year. The stock has gained 29.9%, outperforming the S&P 500’s 15.9% gain and the broader industry’s 16.2%.

The stock has a market cap of $35.29 billion. The company’s next five-year earnings growth rate is also favorable at 12.9% compared with the 9.9% increase of the S&P 500.

 

The company has a positive earnings surprise of 10.3% for the last four quarters. Also, it has a long-term expected earnings growth rate of 12.5%.

Baxter International has an impressive Growth Style Score of B as well. Our Growth Style Score highlights all the vital metrics of a company’s financials to obtain a clearer picture of the quality and sustainability of its growth. Our research shows that stocks with Style Scores of A or B, when combined with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold), offer the best investment opportunities.

Let’s find out whether the recent positive trend is a sustainable one.

Strategic Acquisition

The market is upbeat about the company’s recent acquisition of the two hemostat and sealant products, RECOTHROM Thrombin topical (Recombinant) and PREVELEAK Surgical Sealant, from Mallinckrodt plc.

Solid Guidance

For 2018, Baxter estimates sales growth of approximately 6-7% at constant currency. Adjusted earnings for the full year are expected in the band of $2.72-$2.80 per share.

Solid Estimate Revision Trend

The company’s estimate revision trend for the current year has been positive. In the past couple of months, 9 analysts moved north, with no movement in the opposite direction. Earnings estimates rose around 2.9% to $2.78 during the same time frame.

Positive Regulatory tidings

The market is also encouraged to note that Baxter International received the FDA approval of Bivalirudin in 0.9 percent Sodium Chloride Injection (bivalirudin).

Other Key Picks

Other top-ranked stocks in the broader medical sector are Bio-Rad Laboratories (BIO - Free Report) , athenahealth, Inc. and Varian Medical Systems, Inc. .

Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The company has a long-term expected earnings growth rate of 20%.

athenahealth is another Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

Varian Medical has a long-term expected earnings growth rate of 8%. The stock carries a Zacks Rank #2.

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