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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
BAX — frequently asked questions
Is Baxter International Inc. overvalued?
In our latest published analysis dated 2026-09-20, BAX looks meaningfully undervalued. The price recorded at analysis is 22,8 USD versus our fair value of 26,9 USD; the high endpoint is presented separately as potential value of 31,1 USD. That implies roughly 18.1% upside to fair value at that date.
Our latest published report, analyzed 2026-09-20, gives BAX a fair value of 26,9 USD and a potential value of 31,1 USD. The conclusion is triangulated across multiple valuation models and weighted by reliability for Baxter International Inc.'s archetype; it is a dated research output, not a live price.
Should I buy BAX now?
Our latest published rating for BAX, analyzed 2026-09-20, is Buy. Baxter International Inc. looks meaningfully undervalued at the analysis-date price of 22,8 USD versus fair value of 26,9 USD; potential value is 31,1 USD. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for BAX?
The dedicated bear-case section in our report analyzed 2026-09-20 documents Baxter International Inc.'s material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is BAX's rating?
Our latest published rating for BAX, analyzed 2026-09-20, is Buy, with a published moat assessment of 5.5/10 (Narrow). It reflects our fair value of 26,9 USD, the potential value of 31,1 USD, and the price recorded at analysis (22,8 USD).
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§1 SintesiEN
Risposta in 30 secondiBuy
Prezzo rispetto al valore
Prezzo
$22.80
Fair value
$26.92
Valore potenziale
$31.12
Al
2026-09-18
Perché può funzionare
Accelerated operating margin recovery toward the industry benchmark of 15.5%, resilient international healthcare demand ($5,122M consolidated international revenue,), and organic free cash flow generation of $332M, accelerating debt retirement toward Potential value of $31.12.
Cosa cambierebbe la nostra valutazione
Failure to achieve operational turnaround and debt paydown leading to terminal EV/Revenue multiple contraction below 2.2x.
Baxter International is rated Buy. At the report-date price of $22.80 on September 18, 2026, shares trade at an 18.1% discount to our Fair value of $26.92. The primary downside risk is that $9.67B in debt and turnaround delays contract valuation multiples. The strongest catalyst is positive operating cash flow of $845M self-funding debt paydown as profitability recovers.4,5
The committee assigns a Buy rating. For investors, this indicates that the stock offers attractive risk-adjusted upside potential as management executes an operational recovery.
As of September 18, 2026, Baxter shares traded at $22.80. This price stands 15.3% below our Fair value of $26.92 and offers 18.1% upside to the midpoint, with Potential value reaching $31.12 under accelerated operational execution.
The primary risk to this thesis is that persistent operational friction fails to reverse trailing GAAP operating losses of -$308M, while high borrowing costs on $9.67B in debt consume cash generation.4,5
The core driver of recovery is Baxter's ability to generate steady cash from its entrenched hospital installed base. Operating cash flow of $845M in FY2025 exceeded capital expenditures of $513M, delivering $332M in free cash flow to reduce debt without diluting shareholders. As operating margins normalize toward 12.5%, consensus projects earnings reaching $2.04 per share by FY2027, lifting enterprise valuation.1,5,6
Shares trade at $22.80, representing an 18.1% discount to Fair value of $26.92 and an EV/Revenue multiple of 1.71x, pricing in restructuring challenges while providing solid recovery upside.4
Consolidated international revenues of $5,122M across Western Europe and emerging markets, provide institutional tender stability that cushions domestic procurement cycles.6
Raccomandazione interna
Baxter is rated Buy because its $22.80 report-date share price trades at an 18.1% discount to Fair value of $26.92, supported by recurring operating cash flow of $845M funding balance sheet deleveraging.4,5
Panoramica dell’azienda
The manufacture of its products requires, among other things, the timely supply or delivery of sufficient amounts of quality components and raw materials. BAXTER INTERNATIONAL INC. acquires its components, raw materials, and other requirements for manufacturing from many suppliers and vendors in various countries, including sometimes from ourselves for self-supplied requirements. The Medical Products & Therapies segment includes sales of its sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products. The Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled anesthetics and drug compounding services. To a lesser extent, the company enters into arrangements for which revenue may be recognized over time.
For example, the company leases medical equipment to customers under operating lease arrangements and recognize the related revenues on a monthly basis over the lease term. Its Healthcare Systems & Technologies segment includes connected care solutions and collaboration tools that are implemented over time.
§2 Scenario ribassistaEN
Under compounding operational distress where global hospital systems freeze procurement and interest expenses escalate, operating cash flow contracts sharply. Obligatory debt service absorbs liquid reserves, eliminating capacity for debt retirement and triggering multiple compression.
A downside path develops if competitive pricing pressure from specialized peers forces gross margin concessions while high debt service burdens exhaust available cash flow. This outcome would be confirmed by gross margin erosion below documented operating floors and persistent annual operating losses.
Come questa tesi può fallire
Terminal valuation contraction from persistent turnaround delays and leverage discount
Persistent operational delays failing to reverse negative operating income of -$308M under $9.67B in total debt compress valuation multiples below 2.2x.4,5
FV impact
-30.8%
Terminal multiple 20% lower
Trigger
Within 12 months
Segnali di allerta precoce da monitorare
I cinque sviluppi che indebolirebbero la nostra tesi d'investimento.
A decline in operational cash collection leaves insufficient funds to cover mandatory capital reinvestment and interest obligations, halting debt paydown and forcing balance sheet restructuring through asset sales or dilutive external financing.
Baxter commands a Narrow economic moat underpinned by customer switching costs in its acute care installed base and regulatory intangible assets. However, pricing flexibility remains constrained by higher-margin specialized medical peers,.
Profitto economico
Economic value generation remains temporarily depressed as return on capital of 0.78% trails computed WACC of 10.84%, reflecting FY2025 operating losses of -$308M.2,5
5.5/ 10
Narrow
Sources of advantage
01Switching Costs — Acute care hospital protocols and clinical integration create high customer switching barriers around Baxter's installed infusion and renal equipment across $6,122M in US revenue.Moderate
02Intangible Assets — Proprietary formulation standards, regulatory clearances, and multi-year institutional tenders protect hospital consumable lines across $3,728M in developed international markets.Moderate
The highlighted cell is Fair value when every assumption sits at its base level ($26.92). Each row and column shows what Fair value becomes when one assumption moves.
Consensus forward adjusted diluted earnings targets are achieved across FY2026 and FY2027.1
Operating margins expand steadily from negative territory toward normalized expectations.5
International hospital procurement remains resilient across developed and emerging markets.6
Under the base path, Baxter delivers gradual operational improvements where operating margins normalize toward historical levels and international healthcare tenders sustain volume demand. Shares reach $26.92 with an estimated return of 18.1% at an assigned likelihood of 45.0%. Confirmation requires meeting forward consensus adjusted diluted earnings targets.1
Operating cash flow reached $845M in FY2025, delivering $332M in positive free cash flow after funding $513M of capital expenditures. This cash generation demonstrates self-funding operational capacity despite reported GAAP net losses of -$957M.5
Allocazione del capitale
Capital allocation strictly prioritizes balance sheet deleveraging and essential facility maintenance over discretionary shareholder payouts. Capital expenditures of $513M in FY2025 were limited to core equipment maintenance while surplus cash was reserved to address $9.67B in total debt obligations.
Returns on capital reflect cyclical trough conditions during restructuring, with upward trajectory tied to normalized operating margin expansion toward target levels.
ROIC of 0.78% sits substantially below the computed WACC of 10.84%.
FY2025 operating cash flow generated $845M despite an operating loss of -$308M.
Depreciation add-backs of $981M provide solid liquidity coverage for mandatory plant reinvestment and debt service.
Elevated borrowing charges restrict discretionary capital deployment
Total debt of $9,667M carries an estimated pre-tax cost of debt of 19.48%.
Financing charges absorb available cash, requiring disciplined focus on debt reduction rather than growth projects.
Ricavi più recenti11,2 Mld USDCAGR dei ricavi +1,1%
Margine operativo-2,7%10 periodi fiscali
Flusso di cassa libero più recente332 Mln USDFY2025
Debito netto7,5 Mld USDFY2025
Dettaglio del conto economicoCome la scala aziendale si traduce in utile dichiarato.
Ricavi11,2 Mld USDCosto del venduto−7,9 Mld USDUtile lordo3,4 Mld USDCosti operativi−3,7 Mld USDReddito operativo-308 Mln USDVoci non operative e imposte−649 Mln USDUtile netto-957 Mln USD
Dati della storia finanziaria
Ricavi
11.244.000.000 USD
Costo del venduto
7.865.000.000 USD
Utile lordo
3.379.000.000 USD
Costi operativi
3.687.000.000 USD
Reddito operativo
-308.000.000 USD
Voci non operative e imposte
-649.000.000 USD
Utile netto
-957.000.000 USD
Panoramica dello stato patrimonialeCome sono detenute e finanziate le attività dichiarate nel periodo selezionato.
Ponte dei flussi di cassaCome il flusso di cassa operativo è diventato flusso di cassa libero nel FY2021.
StockMarketAgent.AI
Riconciliazione del flusso operativo
Utile netto1,3 Mld USDAmmortamenti e svalutazioni+867 Mln USDCompensi basati su azioni+146 Mln USDAltre rettifiche operative−75 Mln USDFlusso di cassa operativo2,2 Mld USD
Riconciliazione della liquidità iniziale e finale
Liquidità iniziale3,7 Mld USDFlusso di cassa operativo+2,2 Mld USDFlusso da investimenti−11,2 Mld USDFlusso da finanziamenti+8,2 Mld USDEffetto dei tassi di cambio−47 Mln USDLiquidità finale3 Mld USD
2,2 Mld USD − 691 Mln USDFlusso di cassa libero 1,5 Mld USD
Dati del ponte dei flussi di cassa
Utile netto
1.284.000.000 USD
Afflusso operativo
2.297.000.000 USD
Ammortamenti e svalutazioni
867.000.000 USD
Compensi basati su azioni
146.000.000 USD
Flusso di cassa operativo
2.222.000.000 USD
Deflusso operativo
75.000.000 USD
Liquidità disponibile
14.203.000.000 USD
Liquidità iniziale
3.736.000.000 USD
Afflusso da finanziamenti
8.245.000.000 USD
Deflusso da investimenti
11.200.000.000 USD
Capex
691.000.000 USD
Altre attività di investimento
10.509.000.000 USD
Effetto dei tassi di cambio
47.000.000 USD
Liquidità finale
2.956.000.000 USD
Flusso da investimenti
-11.200.000.000 USD
Flusso da finanziamenti
8.245.000.000 USD
Ricavi per area geograficaQuota dei ricavi totali per 2025-12-31.
11,2 Mld USDRicavi totali
Ricavi per area geograficaQuota
United States6,1 Mld USD54,4%+4,6% a/a
Western Europe Canada Japan Australia And New Zealand3,7 Mld USD33,2%+8,5% a/a
Eastern Europe Middle East Africa Latin America Asia1,4 Mld USD12,4%+3,3% a/a
Fonte: SEC EDGAR · Depositato 2026-02-12 · SEC EDGAR
Dati sulla composizione dei ricavi: Ricavi per area geografica
Ricavi per area geografica
Ricavi
Quota
a/a
United States
6,1 Mld USD
54,4%
4,6%
Western Europe Canada Japan Australia And New Zealand
3,7 Mld USD
33,2%
8,5%
Eastern Europe Middle East Africa Latin America Asia
1,4 Mld USD
12,4%
3,3%
Ricavi e utiliCome la scala aziendale si traduce in utile dichiarato.
Liquidità e debitoLiquidità disponibile rispetto all’indebitamento totale.
Generazione di cassaFlusso di cassa operativo rispetto al flusso di cassa libero.
RedditivitàEvoluzione dei margini lordo, operativo e netto.
Dati finanziari puntuali utilizzati nell’analisi del 2026-09-20.
Baxter International Inc. (BAX) trades at 11.2x forward earnings against a peer median of 12.0x. Its EV/EBITDA of 10.2x compares with a peer median of 15.8x. The comparison uses 4 peers: The Cooper Companies Inc., Align Technology Inc., Charles River Laboratories International Inc. and Solventum Corporation, as of 2026-09-19 to 2026-09-20.
Accelerating hospital procedural volumes and acute care technology upgrades drive steady replacement demand for specialized infusion systems and hospital consumables.
Ciclo ribassista
Hospital procurement austerity and consolidated tender buying enforce pricing concessions on commoditized clinical supplies while elevating working capital burdens.
Trend secolari
Trend
Impatto
Nota
Aging global demographics expanding acute and chronic care procedures
positive
Expanding elderly cohorts drive steady institutional demand for continuous renal replacement therapies and clinical nutrition.
Hospital purchasing consolidation and tender price scrutiny
negative
Health systems leverage buying scale to negotiate aggressive discounts on standardized medical hardware and consumables.
Healthcare infrastructure expansion across emerging regions
positive
Public hospital modernization across EMEA and Asia supports volume demand outside mature domestic healthcare systems.
Posizionamento
Baxter holds an extensive installed acute care footprint, though its 30.05% gross margin leaves less operational cushion than higher-margin specialized peers,.3
§11 Gestione della posizioneEN
Dimensionamento
3-4%
Position sizing reflects the committee Buy rating supported by an 18.1% valuation discount to Fair value. Investors should establish a 3-4% core portfolio position, balancing turnaround upside against balance sheet leverage.4
Rischio
Cap portfolio allocation at 4.0% and re-examine thesis if debt paydown stalls or quarterly operating cash flow weakens.
Tranche di ingresso
Livello
Azione
Perché
Below $23.00
Deploy initial tranche
Establishes core exposure at an attractive discount to Fair value of $26.92.
Below $21.50
Deploy secondary tranche
Takes advantage of market volatility near the conservative valuation boundary.
Consensus models revenue expanding to $11,864M by FY2027 and adjusted diluted earnings per share recovering to $2.04, supported by steady healthcare procurement across international hospital networks.1,6
Income
Hold
With capital allocation strictly prioritized toward balance sheet deleveraging to service $9.67B in total debt, dividend distributions of $0.04 per share offer modest income, focusing total return on share price recovery.4
§14 Raccomandazione finaleEN
Azione
Comprare
Baxter is rated Buy based on an 18.1% discount between the report-date price of $22.80 and Fair value of $26.92. Operational turnaround progress is supported by positive FY2025 operating cash flow of $845M, $332M in free cash flow, and consensus projecting earnings per share of $2.04 by FY2027.1,4,5
Investors should establish a 3-4% core portfolio position, capitalizing on an attractive valuation entry while verifying that quarterly cash flow generation continues to support scheduled debt reduction.
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Sources
The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Persistent input cost inflation or tender discounts erode unit profitability, proving that specialized competitors retain superior pricing leverage and preventing operational conversion into sustained positive operating earnings.
Attuale:30.05% in FY2025
Avviso seGross margin falling below 28.0% across FY2026
Volume attrition or sovereign healthcare reimbursement cuts across European tenders undermine the geographical diversification that insulates top-line performance from domestic hospital procurement cycles.
Attuale:$3,728M in FY2025
Avviso seInternational revenue contracting more than 5.0% YoY in FY2026
05
Total Balance Sheet Debt
Inability to de-escalate leverage raises refinancing expenses under elevated interest rates, absorbing operating cash generation into financing charges rather than productive operational reinvestment.
Attuale:$9,667M as of September 2026
Avviso seTotal debt exceeding $10,000M through FY2026
International market expansion in emerging hospital systems outpaces mature market replacement rates.6
The bull path envisions accelerated supply chain streamlining that restores operating profitability toward sector benchmarks, enabling rapid debt repayment and multiple expansion. Under this outcome, shares reach $35.73 delivering a return of 56.7% with a probability of 25.0%. Confirmation would appear through consecutive quarterly margin beats.