Reasons to Retain Baxter International (BAX) in Your Portfolio Now

Core Viewpoint - Baxter International (BAX) is positioned for growth due to the demand for its essential medical products and ongoing transformational actions, although inflationary pressures remain a concern [1] Company Performance - BAX shares have decreased by 12.4% year-to-date, while the industry has grown by 3.1% and the S&P 500 Index has increased by 11.6% [1] - The company reported revenues of $3.59 billion in the first quarter, reflecting a 2% increase on a reported basis and a 3% increase at constant currency [5] Market Dynamics - Demand for Baxter's products has shown a sustained recovery in 2023, driven by increasing hospital admissions and procedural volumes, as well as higher capital spending by hospitals expected in 2024 [3] - The Care & Connectivity Solutions category experienced a decline, primarily due to softness in the U.S. primary care market, but is anticipated to return to growth in the second half of the year [3] Transformational Actions - Baxter is completing transformational actions aimed at creating a more resilient supply chain and aligning with its manufacturing footprint by mid-2024 [4] - The company divested its BioPharma Solutions business for $4.25 billion in cash to focus on core operations and reduce interest expenses [4] - A standalone kidney care company, Vantive, is expected to be formed by July 2024, comprising the Renal Care and Acute Therapies product categories [4] Regulatory Developments - Baxter received FDA approval for an expanded indication for Clinolipid to be used in pediatric patients, including preterm and term neonates [6] - The company launched five new injectable products in the U.S. to enhance its pharmaceutical portfolio, which are expected to meet patient needs and provide convenience for healthcare professionals [6] Challenges - Despite recovery, Baxter faces ongoing pressure related to hospital admissions and procedural volumes, with supply chain disruptions impacting growth [7] - The APAC market contributes nearly 17% to Baxter's revenues, with China representing a significant growth opportunity, although challenging market dynamics may affect the company's performance in the region [7] Financial Estimates - The Zacks Consensus Estimate for 2024 revenues is $15.11 billion, indicating a 1.1% decline from the previous year, but revenues are expected to grow by 4% [8] - The consensus estimate for adjusted EPS is $2.91, reflecting an 11.9% increase from the previous year, with a 0.7% improvement in estimates over the past 30 days [8]