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Why Baxter’s Analysts Are Leaning toward a ‘Hold’

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Updated

BAX’s analyst recommendations

Baxter International (BAX) announced its 3Q17 earnings results on October 25, 2017. Revenues and earnings exceeded the Wall Street analysts’ estimates for the quarter. 

As of October 27, 2017, according to the recommendations of 17 brokerage companies taken in a Reuters survey, six (~35%) analysts provided a “buy” rating on the BAX stock, while ten (59%) rated the stock a “hold.” Only one analyst provided a “sell” rating.

Baxter’s consensus analysts’ estimated target price for the next 12 months is $67.3, representing a 12-month return potential of ~3.6%, compared with Baxter’s closing price of $64.9 on October 25, 2017.

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Target prices and revised recommendations

After BAX’s earnings release on October 25, 2017, some of the brokerage companies updated their ratings and 12-month target price of the stock. On October 25, 2017, Evercore ISI reiterated its “buy” rating on BAX stock while raising its price target from $52 per share to $56 per share.

On October 27, 2017, peers Becton, Dickinson, and Company (BDX), Abbott Laboratories (ABT), and Thermo Fisher Scientific (TMO) had consensus analysts’ target price estimates of $209.4, $60.8, and $219.1, respectively, for the next 12 months. These target prices represent one-year returns of -0.3%, 9.9%, and 13.8%, respectively.

To diversify company-specific risks, you might consider the iShares Core S&P 500 ETF (IVV) for investment. IVV holds ~0.15% of its total holdings in BAX.

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