Reasons to Retain Baxter International Stock in Your Portfolio Now

Baxter International BAX is currently in transition following the divestiture of Kidney Care, balancing near-term execution challenges with longer-term structural opportunities. Management commentary highlights resilience in select franchises, improving operational discipline, and a renewed focus on balance sheet strength amid product-specific and demand-related headwinds.

Shares of this Zacks Rank #3 (Hold) company have lost 31.4% in the past six months compared with the industry's 10.7% decline. The S&P 500 Index has jumped 11.5% in the same time frame.

BAX, with a market capitalization of $10.1 billion, is a global medical technology company providing items, such as infusion pumps and intravenous solutions. The company has an earnings yield of 11.8% compared with the industry's 2.5%. It anticipates earnings to improve 7.4% over the next five years.

Positive Factors Driving Prospects

Sustained Momentum in Healthcare Systems & Technologies (“HST”): HST continues to be Baxter’s most consistent growth engine. In the third quarter, segment sales grew 2% operationally, supported by 30% year-over-year growth in U.S. capital orders, driven by strength across Patient Support Systems, Care Communications and Surgical Solutions.

Management highlighted no visible slowdown in U.S. hospital capital spending despite macro uncertainty, and described the order pipeline as robust. While margins were pressured by tariffs and higher R&D investment, the top-line visibility and backlog strength position HST as a medium-term stabilizer and growth contributor as cost headwinds normalize.

Strong Performance in Advanced Surgery: Advanced Surgery within Medical Products & Therapies grew 11% globally, supported by steady procedure volumes, strong commercial execution, and solid demand for hemostats and sealants. Importantly, this business carries favorable mix and margin characteristics, partially offsetting weakness elsewhere in the segment.

Management commentary suggests demand is broad-based across regions rather than recovery-driven, indicating structural durability rather than a one-off rebound.

Long-Term Recovery Potential in Core Consumables: Despite near-term disruption, management reiterated confidence in the long-term strength of IV solutions and infusion therapy, citing historical recovery patterns following conservation-driven demand shocks. The company also continues to see interest in its infusion pump portfolio, with Spectrum IQ acting as a bridge product during the Novum LVP hold. Combined with disciplined pricing and enterprise-wide efficiency initiatives (Baxter GPS), these factors support a recovery-driven growth algorithm once operational issues resolve.

Key Challenges

Prolonged Novum Infusion Pump Disruption: The shipment and installation hold on the Novum IQ large-volume pump remains Baxter’s key operational challenge and is now expected to extend beyond 2025. This continues to pressure Infusion Therapies & Technologies sales and elevate customer uncertainty. While Spectrum IQ offers some offset, prolonged delays raise the risk of lost placements, customer attrition, and manufacturing underutilization, weighing on growth and investor confidence.

Persistent Softness in IV Solutions Demand: U.S. IV solutions demand remains below pre–Hurricane Helene levels due to ongoing fluid-conservation practices in hospitals. Management expects recovery to be gradual, with some degree of conservation likely extending into 2026. This dynamic weighs on volumes, manufacturing absorption, and gross margins, limiting operating leverage. Despite confidence in the long-term fundamentals of its IV business, limited near-term visibility is complicating forecasts and weighing on Baxter’s overall growth algorithm.

Unfavorable Mix and Margin Pressure in Pharmaceuticals: Within Pharmaceuticals, growth is increasingly driven by lower-margin compounding services, while higher-margin injectables and premix products face softness, particularly in the United States. Shifts in clinical protocols toward IV push and competitive pricing pressures have weighed on mix and profitability, contributing to margin contraction. While management is working to reinforce the clinical value proposition of premix offerings and sharpen commercial execution, recovery is expected to be gradual, positioning the segment as a near-term headwind to consolidated margin expansion.

Estimate Trend

The Zacks Consensus Estimate for 2026 revenues is pegged at $11.29 billion, indicating a 2.1% improvement from the previous year’s level.

The consensus mark for adjusted earnings per share (EPS) is pinned at $2.32, indicating a 1.9% decrease from the year-ago reported number. The consensus estimate for adjusted EPS has remained stable in the past 30 days.

Baxter International Inc. Price

Baxter International Inc. price | Baxter International Inc. Quote

Stocks to Consider

Some better-ranked stocks in the same industry are Phibro Animal Health PAHC, Boston Scientific BSX and ResMed RMD.

Phibro Animal Health, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 12.8%. PAHC’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.77%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Phibro Animal Health’s shares have rallied 36.7% against the industry’s 10.7% decline in the past six months.

Boston Scientific, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 16.4%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 7.36%.

Boston Scientific’s shares have lost 11.7% compared with the industry’s 10.7% decline in the past six months.

ResMed, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 13.7%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.04%.

ResMed’s shares have lost 6.7% compared to the industry’s 10.7% growth in the past six months.

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This article originally published on Zacks Investment Research (zacks.com).

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