Baxter International Inc. BAX has had an impressive run on the bourses of late. Last year, the company has added 46.9%, outperforming the broader industry’s gain of 24.9%. The current level is also higher than the S&P 500’s return of 19.9%. Recurring revenue stream, expanding product portfolio and strong presence in the international markets are key positives. The stock has a Zacks Rank #2 (Buy).
Here we take a sneak peek at the major factors driving growth for Baxter at the moment:
The year 2017 has been a favorable one for Baxter on the regulatory front. Recently, management confirmed that the FDA has granted two new approvals for temporary importation of certain drugs from the facilities in Canada and Mexico. With this development, Baxter now has four operational sites approved to meet demand in the U.S. markets.
Furthermore, the FDA approval of new premixed injectables is a key catalyst. The company’s new product — the home peritoneal dialysis (PD) technology — also received an FDA nod. The platform leverages on Baxter’s flagship AMIA automated peritoneal dialysis (APD) system.
In the recent past, Baxter achieved a regulatory milestone for its advanced dialysis technology. The company received an approval from the FDA for its home PD solution system to improve patient access to home dialysis.
Baxter has a strong presence in foreign markets which makes international diversification a core component of its strategy. In a bid to fortify its overseas presence, the company has launched the oXIRIS set for continuous renal replacement therapy (CRRT) and sepsis management protocols in select markets of Europe, Middle East and Africa.
Notably, oXIRIS, which leverages on the company’s flagship PRISMAFLEX system, is expected to lend Baxter a competitive edge in the global market. With a large proportion of sales coming from overseas markets, Baxter should benefit from developing countries' incremental investments in health care systems. Recent acquisitions position the company well for revenue growth in the rapidly-expanding Asian and Latin American markets.
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Other Key Picks
A few other top-ranked stocks in the broader medical sector are PetMed Express PETS, Luminex Corporation LMNX and IDEXX Laboratories IDXX.
Notably, PetMed Express sports a Zacks Rank #1 (Strong Buy). The company has a long-term expected earnings growth rate of 10%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Luminex represented a return of 6.2% over the last year. The stock has a Zacks Rank #1.
IDEXX Laboratories has a long-term expected earnings growth rate of 20.4%. The stock has climbed 39.2% over a year’s time and has a Zacks Rank #2.
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