BAX - Embedded Expectations Analysis - 2020 05 26
Baxter International Inc. (BAX:USA) currently trades above corporate average relative to UAFRS-based (Uniform) earnings, with a 25.1x Uniform P/E. Even at these levels, markets have bearish expectations for the firm, and management appears concerned about their supply chain, sales, and pump platformSpecifically, management may lack confidence in their ability to supply hospitals with what they need, sustain global sales growth, and prioritize strategic investments in their innovation pipeline. Furthermore, they may be exaggerating their ability to continue operations without disruptions, and they may lack confidence in their ability to maintain their adjusted operating margin and prepare for coronavirus headwinds. They may also have concerns about supply chain disruptions, the reduction of new pump installations, and incremental inventory increases. Moreover, they may be overstating the potential of their new pump platform, and they may be concerned about near-term hospital buying priorities and the negative impact of the bloodlines business exit
Baxter International, through its subsidiaries, provides a portfolio of healthcare products, including acute and chronic dialysis therapies; sterile intravenous solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; and surgical hemostat and sealant products. These products are used by hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors' offices and by patients at home under physician supervision. The company manages its business based on three geographic segments: Americas (North and South America), Europe, Middle East and Africa and Asia-Pacific.
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