UBS raises Baxter stock price target to $35 from $32.50

On Monday, UBS analyst Danielle Antalffy updated the financial outlook for Baxter International (NYSE:BAX), raising the company’s price target to $35.00 from the previous $32.50. Despite this adjustment, the firm maintained a Neutral rating on the healthcare company’s shares, which currently trade at $35.08 with a market capitalization of $17.9 billion. According to InvestingPro data, analyst price targets for the stock range from $30.00 to $57.82.

Baxter International’s shares have been on an upward trajectory following the announcement of their fourth-quarter results for 2024, which showcased a robust organic sales growth of 6%. This figure takes into account an approximate 400 basis points impact from a hurricane. The company also reported earnings per share (EPS) that exceeded market expectations. This performance came despite a $0.10 per share headwind attributed to the hurricane, which was only partially compensated by an estimated $0.09 per share benefit from reduced interest expenses and tax rates. InvestingPro data shows the stock has gained nearly 10% in the past week and 16% year-to-date, with annual revenue reaching $10.64 billion.

The encouraging fourth-quarter results, coupled with the company’s guidance for sales growth and EPS in 2025 that surpasses consensus, indicate to UBS that Baxter’s efforts to rejuvenate its product pipeline and set the company on a path to long-term growth are beginning to bear fruit. However, UBS cautions that it is premature to consider this a sustained trend, as more consistent results and concrete evidence of ongoing momentum are needed to support a more optimistic outlook. InvestingPro has identified several key factors, including expected net income growth this year and a 55-year track record of consistent dividend payments, though current technical indicators suggest the stock may be overbought.

Additionally, the ongoing search for a new CEO at Baxter introduces an element of uncertainty. UBS notes that it is unclear how the company’s underlying strategy might be altered depending on who is appointed as the next chief executive. The firm looks forward to gaining more visibility on the potential strategic shifts that could come with new leadership before fully endorsing the possibility of further stock appreciation. For deeper insights into Baxter’s financial health, valuation metrics, and growth prospects, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which covers over 1,400 top US stocks.

In other recent news, Baxter International Inc. reported strong financial results for the fourth quarter of 2024, surpassing analyst expectations. The company achieved an adjusted earnings per share (EPS) of $0.58, exceeding the forecast of $0.52, and recorded revenue of $2.75 billion, beating the anticipated $2.67 billion. This performance was bolstered by the successful launch of the Novum IQ infusion pump, which contributed to a 50% growth in their infusion business. Baxter has also provided a positive outlook for 2025, expecting sales growth of 5-6% and an adjusted EPS guidance of $2.45-$2.55. The company recently completed the sale of Vantiv, marking the final step in a series of strategic actions to transform its business. Despite challenges such as the impact of Hurricane Helene, which reduced Q4 sales by $110 million, Baxter demonstrated resilience with a swift recovery. Analyst firms like JPMorgan and Goldman Sachs have highlighted the company’s strategic focus and its ongoing CEO search, which could influence its future direction.

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