We came across a bullish thesis on Baxter International Inc. on DeepValue Capital’s Substack. In this article, we will summarize the bulls’ thesis on BAX. Baxter International Inc.’s share was trading at $22.44 as of August 4th. BAX’s trailing and forward P/E were 84.46 and 8.71, respectively according to Yahoo Finance.
Baxter International (BAX), a nearly century-old leader in lifesaving medical technologies, has seen its shares collapse over 75% from peak levels, now trading at less than 8x normalized free cash flow versus a historical median of 24x. The company operates across critical healthcare segments, including medical products, infusion systems, advanced surgical tools, pharmaceuticals, and connected-care platforms, serving hospitals, surgical centers, and home-care patients globally. Recent divestitures, including the Vantive kidney-care spin-off and biopharma solutions unit, have streamlined operations and generated over $3 billion in proceeds, positioning Baxter for margin expansion and strategic reinvestment.
New CEO Andrew Hider, effective September 2025, brings a strong track record of operational improvement and value creation, with plans to cut stranded costs, modernize supply chains, and accelerate R&D into next-generation infusion systems and AI-powered surgical solutions. These efforts aim to achieve a 16.5% adjusted operating margin in 2025 and return Baxter to growth mode. Industry tailwinds add support, with large addressable markets in IV solutions, infusion pumps, smart beds, and generic injectables all projected to grow at mid-to-high single-digit CAGRs. NeAar-term catalysts include hospital volume recovery post-inventory destocking, a revamped Novum IQ infusion pump, and continued simplification.
Risks remain—product safety issues, litigation, regulatory hurdles, and macro softness—but Baxter’s financial flexibility and leadership change provide a credible path forward. With normalized growth, margin recovery, and a rerating to historical valuation multiples, shares could exceed $70 by 2028, representing a potential 250% return and an attractive turnaround opportunity in the large-cap healthcare sector.
Previously, we covered a bullish thesis on Intuitive Surgical, Inc. (ISRG) by The Antifragile Investor in January 2025, which highlighted the company’s dominance in robotic surgery through its da Vinci system, strong IP moat, and recurring revenue model. The company’s stock price has depreciated by approximately 10.3% since our coverage. This is because growth expectations were moderated, but the thesis still stands due to its entrenched leadership. DeepValue Capital shares a similar view on healthcare innovation but emphasizes a valuation-driven turnaround in Baxter with restructuring and new leadership as key catalysts.
