Baxter's sell-off: A buying opportunity for long-term investors

Baxter International Inc. (NYSE:BAX) is undervalued and overlooked, according to Barclays analyst. Despite a 24% decline after Q2 results, the analyst believes the sell-off is "significantly overdone" and sees current levels as an attractive entry point. The company still expects 2025 operational sales growth of 3%-4% and EPS guidance of $2.42-$2.52. The analyst believes investor concerns about pump delays and execution risks are overly discounted in the stock price, creating an opportunity for value-oriented investors.

Baxter International Inc. (NYSE:BAX), a healthcare company, has seen its stock drop by 24% following its Q2 results, raising questions about its valuation. Despite the recent decline, Barclays analyst believes the sell-off is "significantly overdone" and sees the current levels as an attractive entry point for value-oriented investors.

The company reported a 14% decline in its stock price over the past month, which was partly attributed to the impact of Hurricane Helene on one of its manufacturing plants. Additionally, Baxter International lowered its full-year guidance, further contributing to the stock's decline. However, the analyst's analysis suggests that the stock's current valuation already reflects these negatives [1].

Barclays analyst highlights that while Baxter International faces challenges, its valuation appears to have adequately priced in these issues. The company's recent operating performance and historical financial health indicate a weak operating performance and financial condition. However, the market seems to have accounted for these issues, making the stock an attractive buy at its current price of around $25 [1].

Despite the challenges, the analyst believes that Baxter International's operational sales growth of 3%-4% and EPS guidance of $2.42-$2.52 for 2025 provide a compelling case for the stock. Investor concerns about pump delays and execution risks are overly discounted in the stock price, creating an opportunity for value-oriented investors [1].

Moreover, the analyst notes that Baxter International's balance sheet remains strong, with a moderate Debt-to-Equity Ratio of 77.2% and a Cash-to-Assets Ratio of 8.0%. The company's cash position, which makes up $1.7 billion of its $21 billion in Total Assets, provides a buffer against potential financial risks [1].

In summary, while Baxter International faces several challenges, the current stock price appears to be undervalued. The company's strong balance sheet and modest growth expectations make it an attractive opportunity for value-oriented investors. However, investors should closely monitor the company's operational performance and financial stability to make informed investment decisions.

References:

[1] https://www.trefis.com/stock/bax/articles/573518/whats-happening-with-baxter-international-stock/2025-08-26