MUSC Health’s new multi year partnership with Baxter International (BAX) to deploy connected care technologies has pushed the stock into focus, as investors weigh what deeper bedside integration could mean for the business.

The MUSC Health agreement lands at a time when sentiment around Baxter is trying to find its footing, with a 13.9% 1 month share price return and a 6.1% year to date share price return contrasting with a 28.8% 1 year total shareholder return decline and deeper 3 and 5 year total shareholder return losses. This suggests that short term momentum has picked up while longer term holders have faced meaningful drawdowns.

If this kind of connected care story has your attention, it could be a good moment to scan other healthcare stocks that might fit your watchlist next.

With Baxter shares down 28.8% over the past year but showing a 13.9% one-month rebound and trading close to some valuation estimates, investors may ask whether this is a reset entry point or if the market is already pricing in future growth.

Most Popular Narrative: 13.1% Undervalued

With Baxter International’s fair value in the most followed narrative sitting at US$23.80 against a last close of US$20.69, the valuation gap has grabbed attention and sharpened the focus on what would need to go right operationally.

The analysts have a consensus price target of $29.0 for Baxter International based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $47.0, and the most bearish reporting a price target of just $19.0.

Want to see what is sitting behind that valuation gap? The narrative leans heavily on a profit swing, steadier margins and a future earnings multiple that is lower than many peers. Curious which specific revenue and earnings paths have been baked into that US$23.80 fair value and how they tie back to Baxter’s current loss making position and muted growth assumptions? The full narrative lays those building blocks out in black and white.

Result: Fair Value of $23.80 (UNDERVALUED)

However, there are still clear risks, including legal and safety issues around Novum infusion pumps and pressure on gross margins that could derail the margin recovery story.

Build Your Own Baxter International Narrative

If this take does not quite match your view or you would rather weigh the numbers yourself, you can build a custom Baxter thesis in under three minutes with Do it your way.

A great starting point for your Baxter International research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.