Baxter International Inc. BAX is currently one of the top-performing stocks in the MedTech space. A strong guidance for 2018 and plethora of regulatory approvals are currently working in the favor of the company.
Shares Up
Shares of Baxter have rallied 19.4% over the past six months compared with the industry’s growth of 19%. The figure is also higher than the S&P 500 index’s increase of 12%.
The Zacks Rank #2 (Buy) stock currently has Growth Score of B. This reflects possibilities of outperformance over the long haul. Our research shows that stocks, with Growth Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
What Makes Baxter an Attractive Pick?
Guidance Raised
Baxter has raised 2018 outlook.
For 2018, the company expects adjusted earnings in the range of $2.94-$3 per share.
Revenues are expected to grow 6% on a year-over-year basis and 5% at constant currency (cc).
For the third quarter of 2018, the company expects sales growth of approximately 3% year over year and 3-4% at cc.
Earnings per share is expected between 72 cents and 74 cents.
In fact, the company has solid projections for all its segments for 2018.
We expect such trends to favor the company in the long run.
Plethora of Regulatory Approvals
Baxter has been witnessing positive tidings on the regulatory front.
Earlier this month, the company announced the FDA approval of Actifuse Flow Bone Graft Substitute for use in a variety of orthopedic surgical procedures. (Read More: Baxter's Actifuse Flow Bone Graft Substitute Gets FDA Nod)
In July, management announced the FDA clearance and Health Canada approval of the Spectrum IQ Infusion System with Dose IQ Safety Software. The Spectrum IQ system is the first-of-its-kind designed specifically for bi-directional electronic medical records (EMR) integration.
Baxter International Inc. Price and Consensus
Baxter International Inc. Price and Consensus | Baxter International Inc. Quote
Which Way Are Estimates Treading?
For the ongoing quarter, the Zacks Consensus Estimate for earnings is pegged at 74 cents, reflecting year-over-year growth of 15.6%. The same for revenues is pegged at $2.79 billion, indicating an increase of 2.9% year over year.
For the full year, the Zacks Consensus Estimate for earnings is pegged at $2.98, reflecting growth of 20.2% from the year ago. The same for revenues is at $11.20 billion, showing an improvement of 6.1% from the previous year.
Other Key Picks
Other top-ranked stocks in the broader medical space are athenahealth ATHN, Masimo Corporation MASI and Veeva Systems VEEV.
athenahealth has a long-term expected earnings growth rate of 17.6%. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Masimo’s long-term earnings growth rate is projected at 14.8%. The stock carries a Zacks Rank #2.
Veeva Systems’ long-term earnings growth rate is estimated at 19.3%. The stock carries a Zacks Rank #1.
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