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Is It Time To Consider Buying Baxter International Inc. (NYSE:BAX)?

Simply Wall St

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Today we're going to take a look at the well-established Baxter International Inc. (NYSE:BAX). The company's stock saw a decent share price growth in the teens level on the NYSE over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Baxter International’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See 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 16.19% above my intrinsic value, which means if you buy Baxter International today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $70.33, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Baxter International’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Baxter International?

NYSE:BAX Past and Future Earnings, July 3rd 2019

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by a double-digit 17% over the next couple of years, the outlook is positive for Baxter International. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

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 financial strength of the company. 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 an eye on BAX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.