Baxter's Upcoming Q2 Earnings: Analyst Says Consistent Performance, Catalysts Can Accelerate Growth & Margins

As Baxter International Inc BAX prepares to release its second-quarter 2023 financial results on July 27, Stifel analyst writes it is an opportune time for investors to consider owning BAX shares. 

The analyst reiterates its recommendation to Buy and revises the target price upward to $56 from $54.

The optimism stems from the anticipated sales growth acceleration and margin expansion that the analyst foresees unfolding in the second half of 2023. 

Additionally, BAX remains an undervalued and underappreciated stock within the Stifel coverage universe.

Despite the significant challenges faced by Baxter and being one of the worst-performing large-cap MedTech stocks this year (down 10%), Stifel analyst says that positive developments in regulatory approvals, new product launches, and financial leadership can potentially have a favorable impact on the stock.

The factors contributing to Baxter's recent underperformance can be attributed to well-known macro headwinds and company-specific issues. These factors have led to mixed earnings results, downward revisions in guidance, and setbacks in the integration of Hill-Rom.

Baxter's fundamentals will start moving more visibly positively in the second half of 2023 and throughout 2024. 

In May, a buyout consortium comprising Warburg Pincus and Advent International was reportedly in talks to acquire Baxter's biopharma solutions business.

BioPharma Solutions offers contract manufacturing services to the pharma and biotech industries. The deal value could reach or exceed $4 billion.

Price Action: BAX shares are up 0.30% at $46.17 on the last check Wednesday.