What Do Analysts Think About The Future Of Baxter International Inc’s (NYSE:BAX)?
In December 2017, Baxter International Inc (NYSE:BAX) released its most recent earnings update. Generally, analysts seem highly optimistic, with profits predicted to ramp up by an impressive 90.05% next year, relative to the previous 5-year average growth rate of -0.22%. With net income at current levels of US$724.00M, we should see this rise to US$1.38B in 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for Baxter International in the longer term. For those interested in more of an analysis of the company, you can research its fundamentals here. View our latest analysis for Baxter International
Can we expect Baxter International to keep growing?
Over the next three years, it seems the consensus view of the 15 analysts covering BAX is skewed towards the positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
From the current net income level of US$724.00M and the final forecast of US$1.90B by 2021, the annual rate of growth for BAX’s earnings is 27.16%. This leads to an EPS of $3.47 in the final year of projections relative to the current EPS of $1.33. Growth in earnings appears to be a result of cost cutting activities, as revenues is expected to grow much slower than earnings. Margins is currently sitting at 6.86%, which is expected to expand to 15.46% by 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For Baxter International, I’ve put together three important aspects you should further examine:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is Baxter International worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Baxter International is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Baxter International? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass 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.
