Yahoo Finance At US$65.70, Is It Time To Put Baxter International Inc. (NYSE:BAX) On Your Watch List?
Let’s talk about the popular Baxter International Inc. (NYSE:BAX). The company’s shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $77.8 at one point, and dropping to the lows of $61.56. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Baxter International’s current trading price of $65.7 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Baxter International’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Baxter International
What is Baxter International worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19.4% above my intrinsic value, which means if you buy Baxter International today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $55.02, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Baxter International has a low beta, which suggests its share price is less volatile than the wider market.
What does the future of Baxter International look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Baxter International’s earnings over the next few years are expected to increase by 50%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? BAX’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on BAX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Baxter International. You can find everything you need to know about Baxter International in the latest infographic research report. If you are no longer interested in Baxter International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
