What Happened?
Shares of healthcare company Baxter International (NYSE: BAX) fell 4.5% in the afternoon session after Barclays lowered its price target on the stock to $30 from $36, signaling a more cautious outlook on the company.
While the investment bank cut its price target, it kept its "Overweight" rating on the medical instruments supplier's shares. This action suggested a more reserved view of Baxter's future performance, even though the analyst still considered the stock favorably compared to others. The significant 16.7% reduction in the price target likely raised concerns among investors about the company's near-term growth prospects, prompting the stock's decline.
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What Is The Market Telling Us
Baxter’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 20% on the news that the company reported disappointing second-quarter results and cut its full-year profit forecast, citing the lingering impact of a hurricane.
The healthcare company pointed to the lingering effects of Hurricane Helene, which damaged a key manufacturing facility and disrupted the supply of its IV solutions. Baxter’s adjusted earnings per share of 59 cents missed analysts' estimates, while revenue of $2.81 billion also came in slightly below expectations. In response to these challenges and what management called demand softness, the company lowered its full-year profit guidance. The weak results and revised outlook prompted a negative reaction from investors.
Baxter is up 2.7% since the beginning of the year, but at $20.04 per share, it is still trading 45.2% below its 52-week high of $36.57 from March 2025. Investors who bought $1,000 worth of Baxter’s shares 5 years ago would now be looking at an investment worth $248.70.
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