Baxter International Inc. BAX
Baxter's deleveraging story is real — total debt fell from $13.4B to $10.0B and the company is actively executing upsized cash tender offers — but FY2025 fundamentals remain deeply impaired, with operating losses widening to -$308M, gross margin compressing to 30.05% from 37.46%, and FCF declining to $323M. Revenue growth of 5.72% to $11.24B and a new CFO appointment (effective Oct 1, 2026) signal early turnaround intent, yet the stock at $26.64 trades at 28.4x EV/EBITDA versus a 7.8x peer median, pricing in a margin recovery the P&L has not delivered.
With shares already up materially from the $15.73 52-week low and trading above both the 50-day ($23.35) and 200-day ($19.87) moving averages, the risk/reward is balanced rather than compelling.
What could go wrong
- Margin deterioration persists. FY2025 gross margin collapsed to 30.05% from 37.46% in FY2024, and operating margin worsened to -2.74% from 0.13%, suggesting cost pressures or mix shifts that could delay profitability recovery.
- Valuation premium to peers. EV/EBITDA of 28.39x is 265% above the peer median of 7.78x, and PS of 1.20x is 48% above the 0.81x median, leaving little room for execution missteps.
- Free cash flow erosion. FCF fell to $323M in FY2025 from $559M in FY2024 and $1.29B in FY2023, constraining flexibility for further debt reduction or reinvestment.
- Leadership transition risk. A new CFO (John Rogers) starts Oct 1, 2026, and the interim CFO arrangement adds execution uncertainty during a critical deleveraging and turnaround phase.
What would change my mind
Where this comes from: FMP annual fundamentals FY2024 vs FY2025 · FMP annual fundamentals and derived_metrics FY2025 · FMP annual fundamentals and derived_metrics FY2025 · FMP annual fundamentals FY2025 vs FY2024. Orin's read on BAX; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All BAX filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Fmr | $1.1B | 0.0% of fund |
| Vanguard Capital Management | $719.6M | 0.0% of fund |
| Vanguard Portfolio Management | $512.9M | 0.0% of fund |
| State Street | $439.4M | 0.0% of fund |
| Geode Capital Management | $300.6M | 0.0% of fund |
| Invesco | $263.6M | 0.0% of fund |
70 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 62 Form 4 filings, net $22.5M. Of the 50 on hand, none was an open-market trade— the rest are grants, option exercises and tax withholding.
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| EV/EBITDA | 26.2× | — | — |
| P/S | 1.06× | 1.89× | — |
| P/B | 2.0× | 2.3× | — |
Its P/E sits 20th percentile of its own last 5 years (−0.56σ from its own mean).
16.3%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $0.3B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$25
$21 – $28 · +6% against today's price
- 15 buy or overweight
- 20 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| BAXBaxter International Inc. | $12B | — | 26.2× | 30.1% | -9.3% | -17% |
| DVADaVita Inc. | $12B | 15.7× | 7.9× | 31.0% | 6.0% | -124% |
The median is of the 1 peers listed above and nothing else — check it against the column. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $-3 | $20.59 · −117% | 2026-06-10 |
| Levered DCF | $32 | $20.59 · +55% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.