Goldman Sachs reiterates Conviction Buy on Baxter stock as new CEO appointed

Investing.com - Goldman Sachs has reiterated its Conviction Buy rating and $37.00 price target on Baxter International (NYSE:BAX), a $15.4 billion healthcare equipment manufacturer, following the company’s announcement of a new CEO. According to InvestingPro data, the stock currently trades at $29.93, suggesting significant upside potential to Goldman’s target.

On Monday, July 7, Baxter announced that Andrew Hider will become president and chief executive officer effective no later than September 3, 2025. Hider’s appointment ends a five-month period during which Board Chairman Brent Shafer has served as interim CEO since February 3, 2025. The appointment comes as InvestingPro analysis shows Baxter as a prominent player in the Healthcare Equipment & Supplies industry, with annual revenue of $10.8 billion.

Goldman Sachs views Hider’s appointment as a positive first step toward improving strategic clarity at Baxter. The firm notes that Hider’s background in industrial automation as CEO of ATS aligns well with Baxter’s business as a high-volume healthcare products manufacturer. This strategic move is particularly significant as InvestingPro data reveals five analysts have recently revised their earnings upward for the upcoming period, with the company expected to return to profitability this year. Discover more insights with InvestingPro’s comprehensive research report, available along with 10+ additional ProTips.

During his tenure at ATS, Hider led portfolio optimization by strategically shifting investments toward higher-growth markets. Goldman Sachs believes Hider brings valuable experience in portfolio management and execution that matches Baxter’s operating needs.

According to management commentary, Hider’s initial focus will be on engaging with key stakeholders, assessing the company’s strategic direction, and establishing processes to drive performance. While Hider comes from outside the MedTech industry, Goldman Sachs notes his 10 years of experience at Danaher (NYSE:DHR) and his work with life sciences customers at ATS as complementary to his new role at Baxter.

In other recent news, Baxter International has reported a strong start to 2025, with its first-quarter earnings surpassing Wall Street expectations. The company posted an adjusted earnings per share (EPS) of $0.55, exceeding the forecast of $0.48, and achieved revenue of $2.63 billion, surpassing the anticipated $2.59 billion. Baxter’s adjusted operating margin improved significantly to 14.9%, and the company has projected full-year sales growth of 7-8%.

Additionally, Baxter has secured a $2.2 billion credit agreement, enhancing its financial flexibility. This amended five-year agreement replaces a previous €200 million credit facility and allows for potential borrowing increases up to $3.3 billion. In leadership developments, Baxter has appointed Andrew Hider as its next CEO, expected to take the helm by September 2025. Both Citi and BofA Securities have reiterated Neutral ratings on Baxter’s stock, noting the strategic potential Hider brings, given his experience in transforming business portfolios through mergers and acquisitions.

UBS also maintained a Neutral rating amid uncertainties about Baxter’s strategic direction post-CEO transition. These recent developments highlight Baxter’s focus on financial restructuring and leadership changes as it continues its strategic transformation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.