Let’s look at Wall Street analysts’ recommendations and target prices for Baxter International (BAX) over the next 12 months. In a Reuters survey of 16 brokerage companies on November 30, 2016, about 25% of analysts rated it as a “buy,” and 68.8% rated it as a “hold.”
Around 6.2% of analysts rated Baxter as a “sell.” Baxter is one of the major medical technologies companies in the United States, offering renal and hospital products to healthcare providers. For a brief introduction to the company, read Getting to Know the New Baxter: Key Growth Drivers for 2016.
The table above provides a recommendation summary for Baxter International over the next year. The consensus 12-month target price for Baxter International is $53.3, a ~19% return potential. Baxter International was trading at $44.8 on November 29, 2016.
According to analysts’ most recent recommendations, the lowest one-year target price for Baxter International was $47, implying a ~5% return potential over the next 12 months. On the other hand, Baxter International’s highest one-year target price was $60, implying a ~34% return potential over the next 12 months.
Peers Becton, Dickinson and Company (BDX), C. R. Bard (BCR), and ResMed (RMD) have average broker target prices of $181, $242.9, and $62.3, respectively. These figures imply returns of 4.8%, 12.5%, and 0.3%, respectively, over the next 12 months.
ETFs with exposures to Baxter International
Investors interested in gaining focused exposure to Baxter International can consider investing in the iShares U.S. Medical Devices ETF (IHI). IHI has 3.9% of its total holdings in Boston Scientific. IHI is one of the largest US medical device ETFs. It tracks the Dow Jones U.S. Select Medical Equipment Index.
You may want to consider investing in healthcare sector ETFs such as the Health Care Select Sector SPDR ETF (XLV) for exposure to Baxter International. XLV has ~2.1% of its total holdings in Baxter. For more industry-diversified exposure, you may want to invest in the iShares Edge MSCI Mininum Volatility USA ETF (USMV), which has ~0.55% of its total holdings in Baxter. USMV tracks the MSCI USA Minimum Volatility Index.
In the next article of this series, we’ll look at Baxter International’s stock performance.