As of May 23, 2025, Baxter International Inc has a Discounted Cash Flow (DCF) derived fair value of $68.87 per share. With the current market price at $30.27, this represents a potential upside of 127.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $44.21 |
| DCF Fair Value (10-year) | $68.87 |
| Potential Upside (5-year) | 46.0% |
| Potential Upside (10-year) | 127.5% |
| Discount Rate (WACC) | 5.3% - 8.0% |
Revenue is projected to grow from $10636 million in 12-2024 to $14674 million by 12-2034, representing a compound annual growth rate of approximately 3.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 10636 | 28% |
| 12-2025 | 9395 | -12% |
| 12-2026 | 9842 | 5% |
| 12-2027 | 10558 | 7% |
| 12-2028 | 10992 | 4% |
| 12-2029 | 11641 | 6% |
| 12-2030 | 12613 | 8% |
| 12-2031 | 12951 | 3% |
| 12-2032 | 13798 | 7% |
| 12-2033 | 14074 | 2% |
| 12-2034 | 14674 | 4% |
Net profit margin is expected to improve from -3% in 12-2024 to 12% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | (326) | -3% |
| 12-2025 | 31 | 0% |
| 12-2026 | 285 | 3% |
| 12-2027 | 563 | 5% |
| 12-2028 | 841 | 8% |
| 12-2029 | 1147 | 10% |
| 12-2030 | 1295 | 10% |
| 12-2031 | 1384 | 11% |
| 12-2032 | 1531 | 11% |
| 12-2033 | 1618 | 11% |
| 12-2034 | 1746 | 12% |
with a 5-year average of $654 million. Projected CapEx is expected to maintain at approximately 5% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 607 |
| 12-2026 | 558 |
| 12-2027 | 528 |
| 12-2028 | 501 |
| 12-2029 | 529 |
| 12-2030 | 562 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 64 |
| Days Inventory | 127 |
| Days Payables | 57 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 722 | 3 | 356 | (56) | 419 |
| 2026 | 1221 | 42 | 497 | 113 | 569 |
| 2027 | 1535 | 83 | 533 | 14 | 905 |
| 2028 | 1841 | 124 | 555 | 139 | 1023 |
| 2029 | 2242 | 168 | 588 | 113 | 1373 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 44.21 | 46.0% |
| 10-Year DCF (Growth) | 68.87 | 127.5% |
| 5-Year DCF (EBITDA) | 28.31 | -6.5% |
| 10-Year DCF (EBITDA) | 45.17 | 49.2% |
Is Baxter International Inc (BAX) a buy or a sell? Baxter International Inc is definitely a buy. Based on our DCF analysis, Baxter International Inc (BAX) appears to be significantly undervalued with upside potential of 127.5%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $30.27.