On Friday, UBS adjusted Baxter International's (NYSE:BAX) financial outlook. Analysts at the firm have revised the price target for the healthcare company, setting it at $40.00, down from the previous target of $42.00. Despite the change in the price target, UBS has decided to maintain a Neutral rating on the company's shares.
The revision of the price target is based on a price-to-earnings (P/E) multiple of approximately 12 times applied to the company's estimated sales for the next four quarters. This new target is a reflection of the firm's assessment of Baxter International's value in the current market, which is trading at about 13 times the 2024 consensus earnings per share (EPS) and approximately 12 times the 2025 consensus EPS.
The analyst's comments provided insight into the rationale behind the price target adjustment. They noted that the updated price target is in line with the multiples at which Baxter International's shares are currently trading. This adjustment takes into account the company's performance compared to the larger cap group average, which trades at around 20 times the current year's consensus EPS and about 17 times the following year's consensus EPS.
Investors and market watchers will likely monitor Baxter International's stock performance about this updated price target and the maintained Neutral rating. The company's future financial reports and market conditions will determine how closely the stock aligns with UBS's expectations.
InvestingPro Insights
As Baxter International (NYSE:BAX) navigates through the market, real-time data from InvestingPro provides a deeper look into the company's financial health and performance trends. With a market capitalization of $18.8 billion and a dividend yield of 3.14%, Baxter stands out for its consistent dividend payments over the last 54 years, including a commendable streak of raising dividends for 7 consecutive years. This commitment to shareholder returns underscores Baxter's position as a reliable player in the Healthcare Equipment & Supplies industry, as reflected by an InvestingPro Tip highlighting its high shareholder yield.
While the P/E ratio appears negative at -503.39, it's important to understand the context behind this metric; analysts predict the company will return to profitability this year, which could offer a more favorable outlook for potential investors. Additionally, the recent price dip, with a 1-week total return of -8.02%, may catch the attention of value-oriented investors, especially since the RSI suggests the stock is in oversold territory, another InvestingPro Tip worth considering.
For those looking to delve deeper into Baxter's prospects, there are additional InvestingPro Tips available, including insights into future earnings revisions and the company's volatility profile. To explore these further, consider using the coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of detailed analysis and data to inform your investment decisions.
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