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Baxter International Faces EPS Decline Ahead of Q4 Earnings

Baxter International is projected to see a 40.9% decrease in EPS compared to last year. With a cautious 'Hold' consensus rating, investors may need to evaluate future prospects carefully before making moves.

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AI Rating:   4

Earnings Per Share (EPS)
The forecast for Baxter International indicates an EPS of $0.52 for Q4, which is a 40.9% decline from the previous year's EPS of $0.88 in the same quarter. This significant EPS drop can negatively impact investor sentiment, particularly as it is an indicator of reduced profitability.

In the previous quarter, Baxter reported an EPS of $0.80, surpassing expectations by 2.6%. However, the anticipated decline for the upcoming quarter shows that the company may struggle to maintain its upward performance. For fiscal 2024, EPS is expected to be $1.83, down 29.6% from $2.60 in fiscal 2023, further raising concerns among investors about future profitability.

Revenue Growth and Net Income
In Q3, Baxter reported revenue of $3.85 billion, slightly exceeding consensus estimates of $3.84 billion. However, comments about revised guidance illustrate uncertainty in future revenue growth, as the company projects a sales growth rate between 1% to 2%. This modest growth, especially in the backdrop of declining EPS, may not excite investors.

The clear drop in net income potential suggested by reduced EPS forecasts indicates financial pressure, which could weigh heavily on stock performance.

Stock Performance
Baxter's shares have decreased by 19.9% over the past year, significantly underperforming the S&P 500 Index. This trend may indicate lingering investor concerns regarding the company’s ability to generate solid returns, which could further affect stock attractiveness.

Analyst Ratings and Price Targets
Currently, the consensus rating on BAX stock is cautious, with most analysts rating it as a 'Hold'. The average price target of $37.12 offers a modest upside of 19.8% from current levels, positioning this stock within a moderate risk environment for investors.

Stocks:  BAX