Baxter (BAX): Reassessing Valuation as Novum Infusion Pump Class Action Lawsuits Escalate

Legal pressure is building around Baxter International (BAX), as several law firms are pursuing class actions over alleged defects in its Novum LVP infusion pumps and how those problems were disclosed to investors.

See our latest analysis for Baxter International.

All of this is hitting a stock that already had weak momentum. A roughly 7.8% 1 month share price return has been unable to offset a steep year to date share price decline and a multiyear slide in total shareholder returns, suggesting sentiment has been deteriorating despite talk of a 2026 turnaround.

If this legal overhang has you thinking about where else to allocate capital in healthcare, it could be worth exploring other healthcare stocks that may offer cleaner growth stories and less headline risk.

Yet with the stock still trading at a double digit discount to analyst targets and sentiment washed out after years of underperformance, are investors being compensated for waiting for a potential 2026 recovery, or is the market appropriately skeptical about future growth?

Most Popular Narrative Narrative: 19.9% Undervalued

With Baxter International last closing at $19.07 against a narrative fair value of $23.80, the valuation case leans on a gradual recovery in growth, margins and market confidence rather than a quick fix.

The analysts have a consensus price target of $29.0 for Baxter International based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $47.0, and the most bearish reporting a price target of just $19.0.

Read the complete narrative.

What kind of earnings rebound could warrant a valuation usually reserved for steadier compounders, and how aggressive are the long term margin assumptions behind it? The narrative breaks those projections down, including the revenue runway, the expected shift from losses to profits and the future multiple needed to close the gap. Curious which combination of growth and profitability upgrades has to line up for this story to work?

Result: Fair Value of $23.80 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained quality issues around Novum infusion pumps and prolonged margin pressure from manufacturing and mix headwinds could easily derail the anticipated recovery.

Find out about the key risks to this Baxter International narrative.

Build Your Own Baxter International Narrative

If you have a different view or want to stress test the assumptions yourself, you can spin up a personalized Baxter thesis in minutes: Do it your way.

A great starting point for your Baxter International research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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