Baxter offers a combination of defensible demand, portfolio simplification and a pathway to profit margin recovery that can appeal to long‑term holders. The company’s products are embedded in day‑to‑day hospital workflows (IV solutions, infusion pumps, dialysis, clinical nutrition, hemostats and sealants, monitoring systems), which creates recurring consumables revenue and high switching costs.
However, the firm is in the middle of a multi‑year turnaround with elevated execution risk. A sharp margin compression despite good revenue growth shows that cost inflation, product mix issues, quality‑related expenses, and perhaps limited pricing power can quickly erode profitability
That’s why the stock trades cheaply at just 7.2 times the company’s forward earnings forecast, a discount to many established medtech and hospital‑supplies rivals.
BAXTER INTERNATIONAL INC. (New York symbol BAX; www.baxter.com) makes specialized equipment for hospitals, including intensive-care-unit beds and electronic diagnostic systems.
Baxter has narrowed its focus in the past few years.
That includes the sale in September 2023 of its BioPharma division for $4.25 billion (or $3.4 billion after taxes), That unit was a contract development and manufacturing organization (CDMO -- meaning it manufactured drug products on behalf of pharmaceutical companies.
More recently, in February 2025, Baxter completed the sale of its Renal Care and Acute Therapies unit called Vantive to investment firm Carlyle Group Inc. (New York symbol CG) for $3.8 billion. Vantive held Baxter’s kidney dialysis machines and related equipment business—and it accounted for 30% of Baxter’s total revenue.
Following the Vantive sale, Baxter has narrowed its focus to drug delivery, clinical nutrition, pharmaceuticals, and hospital equipment including patient support and surgical systems.
Both divestitures were also driven by the need to pay down debt Baxter incurred from its $12.2 billion acquisition of Hill-Rom in 2021.
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Baxter’s dividend slashed to protect balance sheet and fund turnaround
In mid-2025, Baxter recalled its Novum infusion pumps over a problem that could lead to an incorrect dosage. The company expected the recall would cost it $105 million.
Despite the hold on sales of Novum pumps, Baxter’s revenue in the fourth quarter of 2025 rose 8.0%, to $2.97 billion from $2.75 billion a year earlier. However, earnings before one-time items fell 24.1%, to $0.44 a share (or a total of $225 million) from $0.58 a share (or $297 million). That drop is due to higher sales of less-profitable products.
Baxter is now cutting jobs and other costs. That will help it pay down its long-term debt of $9.47 billion, which is a high 104% of its market cap. (It also held cash of $1.97 billion.)
To further conserve cash, the company cut your quarterly dividend by 94.1% with the January 2026 payment. The new annual rate of $0.04 yields 0.2%.
In 2026, Baxter will probably earn $2.45 a share, and the stock trades at 7.2 times the estimate. That’s a low p/e in light of the company’s high market share and high research spending (4% of revenue).
Recommendation in Wall Street Stock Forecaster: Baxter International Inc. is a hold.
