As of December 15, 2025, Baxter International Inc's estimated intrinsic value ranges from $1.10 to $58.03 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $4.93 | -74.3% |
| Discounted Cash Flow (5Y) | $1.10 | -94.3% |
| Dividend Discount Model (Multi-Stage) | $3.02 | -84.2% |
| Earnings Power Value | $58.03 | +203.0% |
Is Baxter International Inc (BAX) undervalued or overvalued?
With the current market price at $19.15, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Baxter International Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.19 | 1.53 |
| Cost of equity | 9.3% | 13.4% |
| Cost of debt | 4.0% | 6.1% |
| Tax rate | 12.6% | 13.3% |
| Debt/Equity ratio | 1.33 | 1.33 |
| After-tax WACC | 6.0% | 8.8% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $1 | $8,339M | 82.0% |
| 10-Year Growth | $5 | $10,309M | 65.7% |
| 5-Year EBITDA | $8 | $12,007M | 87.5% |
| 10-Year EBITDA | $11 | $13,184M | 73.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $2,681M |
| Discount Rate (WACC) | 8.8% - 6.0% |
| Enterprise Value | $30,568M - $44,647M |
| Net Debt | $7,776M |
| Equity Value | $22,792M - $36,871M |
| Outstanding Shares | 514M |
| Fair Value | $44 - $72 |
| Selected Fair Value | $58.03 |
| Metric | Value |
|---|---|
| Market Capitalization | $9844M |
| Enterprise Value | $17620M |
| Trailing P/E | 0.00 |
| Forward P/E | 0.00 |
| Trailing EV/EBITDA | 12.05 |
| Current Dividend Yield | 414.46% |
| Dividend Growth Rate (5Y) | 5.68% |
| Debt-to-Equity Ratio | 1.33 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $1.48 |
| Discounted Cash Flow (5Y) | 29% | $0.27 |
| Dividend Discount Model (Multi-Stage) | 24% | $0.60 |
| Earnings Power Value | 12% | $5.80 |
| Weighted Average | 100% | $9.60 |
Based on our comprehensive valuation analysis, Baxter International Inc's intrinsic value is $9.60, which is approximately 49.9% below the current market price of $19.15.
Key investment considerations:
Given these factors, we believe Baxter International Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.