Baxter International Inc

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BAX : NYSE : Health Care
$61.1 -0.28 | -0.46%
Today's Range: 60.9962 - 61.52
Avg. Daily Volume: 3150600.0
06/26/17 - 3:12 PM ET

Financial Analysis


BAXTER INTERNATIONAL INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. BAXTER INTERNATIONAL INC has strong liquidity. Currently, the Quick Ratio is 1.85 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 3.69% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)2475.02375.0
EBITDA ($mil)569.0398.0
EBIT ($mil)380.0209.0
Net Income ($mil)272.03380.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)2858.03443.0
Total Assets ($mil)15659.017350.0
Total Debt ($mil)2787.03357.0
Equity ($mil)8686.09019.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin50.3848.59
EBITDA Margin22.9816.75
Operating Margin15.358.8
Sales Turnover0.660.57
Return on Assets11.8522.58
Return on Equity21.3240.42
Debt Q1 FY17 Q1 FY16
Current Ratio2.722.1
Debt/Capital0.240.27
Interest Expense20.033.0
Interest Coverage19.06.33


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)542.71551.22
Div / share0.130.12
EPS0.496.13
Book value / share16.016.36
Institutional Own % n/a n/a
Avg Daily Volume3128785.02771888.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 44.62 for the Health Care Equipment & Supplies industry and a discount compared to the S&P 500 average of 25.75. To use another comparison, its price-to-book ratio of 3.79 indicates a premium versus the S&P 500 average of 3.09 and a discount versus the industry average of 5.11. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, BAXTER INTERNATIONAL INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
BAX 18.11 Peers 44.62   BAX 15.10 Peers 28.17

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

BAX is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

BAX is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
BAX 23.70 Peers 25.37   BAX NM Peers 1.00

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

BAX is trading at a valuation on par with its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

BAX's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
BAX 3.79 Peers 5.11   BAX -49.17 Peers 114.13

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

BAX is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, BAX is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
BAX 3.21 Peers 5.26   BAX 3.24 Peers 14.54

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

BAX is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

BAX significantly trails its peers on the basis of sales growth

 

 

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