Artisan Mid Cap Value Fund’s Views on Baxter International (BAX)

Fund Performance - Artisan Mid Cap Value Fund's Investor Class returned 0.97%, Advisor Class returned 0.98%, and Institutional Class returned 0.97% in Q3 2025, underperforming the Russell Midcap Value Index which returned 6.18% [1] - The equity markets rallied in Q3, driven by strong corporate earnings, rising AI capital expenditures, and expectations of economic support from US fiscal policy and lower interest rates [1] Company Focus: Baxter International Inc. - Baxter International Inc. (NYSE:BAX) had a one-month return of 7.38% but lost 34.25% over the last 52 weeks, closing at $19.50 per share with a market capitalization of $10.024 billion on January 2, 2026 [2] - The healthcare sector, including Baxter, was a significant source of underperformance for the fund, with three of the four biggest detractors coming from this sector [3] Company Challenges and Strategy - Baxter has faced growth challenges post-COVID due to supply-chain issues and delayed normalization of procedure volumes, leading to disappointing performance [3] - The company has undergone a multiyear restructuring, selling non-core operations to become a more profitable growth entity, although this has created confusion among investors [3] - Baxter's stock is currently trading at a single-digit multiple on forward earnings, near its lowest valuation levels, and the company is using free cash flow to pay down debt and return capital to shareholders [3]