Baxter (BAX) Scales 52-Week High: What's Behind The Rally

Share price of Deerfield, IL-based Baxter International Inc. (NYSE:BAX) scaled a new 52-week high of $60.47 on Jun 21, closing a bit lower at $60.05. The company has gained around 3.68% over the past month, much better than the S&P 500’s addition of 1.98%.

Over the past three months, this Zacks Rank #2 (Buy) stock has steadily outshined the Zacks categorized Medical - Products with respect to share price. The stock has climbed 16.17%, higher than the broader industry’s gain of 9.81%. Average volume of shares traded over the last three months was remarkable at approximately 3.3 million. The stock has a market cap of $32.55 billion.

Further, the company’s estimate revision trend for the current quarter is favorable. In the past 60 days, seven estimates have moved up with no downward revision. The magnitude of estimate revision over the same time period increased 11.8% to 57 cents per share. The companyalso has a four-quarter average positive earnings surprise of 17.14%.

Growth Catalysts

The latest 52-week high came on the back of the company’s impressive product pipeline. The company has recently signed an agreement with India-based Dorizoe Lifesciences for expansion of its generic injectables pipeline. The duo is expected to develop more than 20 generic injectable products that include anti-infectives, oncolytics and cardiovascular medicines.

Baxter International also recently achieved a regulatory milestone for its advanced dialysis technology. The company received guidance from the FDA clarifying the regulatory pathway for its home peritoneal dialysis (PD) solution system to improve patient access to home dialysis.

Notably, Baxter International’s home solution system is the first known technology designed to reduce storage and weight handling requirements that come with traditional PD therapy. Management claims to have the first patient on therapy with the new system as part of a clinical trial in 2018. Regulatory submission is expected in 2019.

Meanwhile, we are looking forward to management’s decision to acquire Claris Lifesciences Limited’s subsidiary Claris Injectables Limited for almost $625 million. The takeover will provide Baxter International with a robust portfolio of ‘generic injectables with 11 molecules, which has been approved in the U.S. of late. The company has accelerated its pace of acquisitions and strategic collaborations that enhance its portfolio, thereby opening up significant long-term growth opportunities.

All these factors are expected to boost the company’s share price in the days ahead.

Other Key Picks

Other top-ranked stocks in the broader medical sector are Align Technology, Inc. (NASDAQ:ALGN) , Inogen, Inc. (NASDAQ:INGN) and Accelerate Diagnostics, Inc. (NASDAQ:AXDX) . While Align Technology and Inogen sport a Zacks Rank #1(Strong Buy), Accelerate Diagnostics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Align Technology has an expected long-term adjusted earnings growth of almost 24.1%. The stock has roughly added 34.7% over the last three months.

Inogen has a long-term expected earnings growth rate of 17.5%. The stock has roughly added 25.3% over the last three months.

Accelerate Diagnostics has an expected long-term adjusted earnings growth of 30%. The stock has roughly gained 24.5% over the last three months.

Looking for Ideas with Even Greater Upside?

Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>