Baxter International Inc (BAX) - Comprehensive analysis
Baxter shares are currently trading at a significant discount to their intrinsic value. Despite the near-term market concerns related to the company's recent management transition and potential tariffs, we believe there is a considerable margin of safety in the shares. In recent quarters, demand for many of Baxter's products has been on the rise due to increased medical utilization. Additionally, new product launches, such as the Novum IQ pump platform, are contributing to this demand. Assuming that tariff exposure remains manageable, as management has indicated, Baxter presents a compelling margin improvement opportunity. Most inflationary pressures in its supply chain are subsiding, and important new group purchasing organization contracts will come into effect in 2025, which should enhance product pricing. We anticipate that profits will grow at a relatively rapid pace in the near term, eventually stabilizing at a more normalized growth rate in the high single to low double digits over the long term.
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