Baxter (BAX) Shares Rise 2.4% in July: Will It Go Higher?

Company Overview - Baxter International's shares have increased by 2.4% in the first seven trading sessions of July after a decline of 13.5% in the first half of 2024, primarily due to inflationary pressures and reduced ESRD patient volume in China [1] - The company's share price recovery in July is linked to discussions with Carlyle Group regarding the potential sale of its kidney care business, which has been in preparation since last year [1][2] Financial Performance - Year-to-date, Baxter's shares have decreased by 11.4%, contrasting with the industry's growth of 0.8% and the S&P 500 Index's increase of 17.7% during the same period [1] - The kidney care segment, which generates over 30% of Baxter's total business quarterly, is being targeted for divestment, with Carlyle Group expected to offer more than $4 billion for the acquisition [2] Strategic Actions - The potential sale of the kidney care segment, named Vantive post-divestment, is anticipated to reduce Baxter's debt levels and enhance cash resources for capital expenditures [3] - Baxter's strategic plans announced in January 2023 include enhancing operational effectiveness and driving shareholder value, which has already seen the divestment of its BioPharma Solutions business for $4.25 billion [3] Future Outlook - A leaner business model post-separation is expected to improve Baxter's performance, with lower debt levels likely reducing interest expenses and boosting net margins [5] - Factors such as increasing hospital admissions and rising procedural volumes are projected to positively impact Baxter's prospects in 2024, supporting a continued recovery in share price [5]