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Earnings Beat: Baxter International Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Simply Wall St
·4 min read

Baxter International Inc. (NYSE:BAX) just released its latest quarterly results and things are looking bullish. The company beat expectations with revenues of US$3.0b arriving 4.8% ahead of forecasts. Statutory earnings per share (EPS) were US$0.69, 6.2% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Baxter International

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earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for Baxter International from 18 analysts is for revenues of US$12.1b in 2021 which, if met, would be a satisfactory 5.1% increase on its sales over the past 12 months. Statutory earnings per share are predicted to soar 89% to US$3.39. Before this earnings report, the analysts had been forecasting revenues of US$12.1b and earnings per share (EPS) of US$3.43 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$93.39. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Baxter International, with the most bullish analyst valuing it at US$105 and the most bearish at US$73.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Baxter International's rate of growth is expected to accelerate meaningfully, with the forecast 5.1% revenue growth noticeably faster than its historical growth of 3.2%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.5% per year. So it's clear that despite the acceleration in growth, Baxter International is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$93.39, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Baxter International analysts - going out to 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - Baxter International has 3 warning signs we think you should be aware of.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.