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Investing.com - BofA Securities has reiterated its Neutral rating and $40.00 price target on Baxter International (NYSE:BAX), a prominent healthcare equipment manufacturer with $10.8 billion in revenue and $1.96 billion in EBITDA. According to InvestingPro analysis, the stock is currently trading in line with its Fair Value.
The firm’s analysis focuses on Baxter’s recent leadership selection, noting the Board sought a candidate with proven innovation, value creation, and operational excellence credentials. InvestingPro data reveals that while the company isn’t currently profitable, analysts expect net income growth this year, with 5 analysts recently revising their earnings estimates upward.
BofA Securities highlights that the new CEO brings experience as a public company leader who successfully transformed his previous company’s portfolio through M&A to target faster-growth areas, particularly in life sciences, which grew 1.5 times faster than other business segments.
The research note points out that under the new CEO’s previous leadership, he doubled his former company’s market capitalization while shifting focus to higher-growth sectors.
Despite the CEO’s previous company being smaller than Baxter International, BofA Securities notes it shared similar complexities with a global manufacturing footprint, giving the new leader relevant experience managing a large, complex diversified global business.
In other recent news, Baxter International Inc. reported its first-quarter 2025 earnings, surpassing Wall Street expectations with an adjusted earnings per share (EPS) of $0.55, compared to the forecast of $0.48. The company also posted revenue of $2.63 billion, exceeding the anticipated $2.59 billion. This strong performance was highlighted by a 5% year-over-year increase in sales from continuing operations and a significant improvement in adjusted operating margin. Additionally, Baxter has entered into a $2.2 billion amended credit agreement, enhancing its borrowing capacity and financial flexibility.
UBS maintained a Neutral rating on Baxter, citing strategic uncertainties related to the CEO transition and post-Vantive sales strategy. Despite positive developments in Baxter’s product portfolio, these uncertainties could affect the company’s market growth rate. Baxter’s ongoing strategic initiatives, such as the Novum IQ pump platform, have contributed to its competitive edge, and the company has projected a full-year 2025 sales growth of 7-8%.
The credit agreement, along with a separate amended term loan, aims to improve Baxter’s liquidity, with the option to increase the total commitment up to $3.3 billion. The company’s proactive financial restructuring is part of its strategic planning to maintain a strong balance sheet and pursue growth opportunities.
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