Argus Research Downgrades Baxter International Inc. (BAX)'s Rating To Hold Following Dividend Cut

Baxter International Inc. (NYSE:BAX) is among the 13 Most Undervalued Stocks Under $20 to Buy. On October 31, Argus Research downgraded its rating of the stock to Hold from Buy.

The adjustment followed the company’s third-quarter fiscal 2025 earnings call a day prior, in which it announced a significant reduction to its quarterly dividend to a mere $0.01 per share, starting January 2026. It is worth noting that the Board declared a quarterly dividend of $0.17 per share in July, which was paid out on October 1.

The management expects the move to help strengthen annual cash flow by well over $300 million. The cash will be used to support the company’s de-leveraging efforts to improve the balance sheet position.

In a research note to investors, Argus Research argued that the firm sees a slower recovery for Baxter International Inc. (NYSE:BAX) under the current CEO, given the uncertainty around Novum, coupled with the company’s weak short-term outlook, including for its IV fluid solutions business.

The medical products maker reported a revenue of $2.84 billion for the third quarter. While this was up 5% year-over-year, it missed estimates of $2.88 billion, due to the continued impact of disruptions at its North Cove facility, which was flooded and shut last year following a hurricane.

As a result, the company now expects its annual sales growth to be between 4% and 5%, down from a prior forecast of 6% to 7%. The management has also trimmed its full-year adjusted EPS forecasts to $2.35 to $2.40, from an earlier guidance of $2.42 to $2.52 per share.

The stock has plunged 19% over the past month, taking its year-to-date slump to nearly 40%.

Baxter International Inc. (NYSE:BAX) is a global medical technology company offering a wide range of healthcare products.

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