Baxter International (BAX) is back in focus after its latest quarterly and full year 2025 results showed continued net losses, fresh goodwill impairments, and guidance calling for flat to 1% US GAAP sales growth in 2026.

The mixed reaction to Baxter International's results shows up in the price action, with a 1 month share price return of 5.5% and a 3 month share price return of 9.6%, but a 1 year total shareholder return decline of 40.1% that points to longer term loss of confidence.

If Baxter's recent numbers have you reassessing healthcare exposure, it could be a good moment to see what else is available through our screener of 28 healthcare AI stocks.

With Baxter trading at a discount to some intrinsic estimates but still reporting sizeable losses and impairment charges, the key question is whether you are looking at a reset valuation or a market that already anticipates limited future growth.

Most Popular Narrative: 4.2% Undervalued

With Baxter International last closing at $20.73 versus a narrative fair value of $21.63, the current setup centers on modest upside tied to a detailed long term earnings and margin story.

Normalization of hospital purchasing patterns and patient admissions is expected to drive increased utilization of Baxter's core IV solutions and infusion systems as fluid conservation efforts abate, providing upside to revenue growth and margin expansion as volumes recover. Baxter's strengthened focus on innovation including new product launches in advanced infusion systems, AI-enabled devices, and compounding aligns with growing demand for efficient, digitalized, and connected healthcare equipment, positioning the company to capture higher margin revenue streams and gain market share.

Curious how modest revenue growth, rising margins, and a lower future earnings multiple still support a higher fair value than today’s price? The full narrative lays out the earnings path, the assumed profitability shift, and the valuation multiple that need to line up for that to hold.

Result: Fair Value of $21.63 (UNDERVALUED)

However, there are still clear pressure points, including ongoing quality and legal issues around infusion pumps, as well as margin headwinds from lower volumes and product mix.

Next Steps

If the mix of risks and potential rewards here feels finely balanced, it is. Take a closer look now and shape your own view with 3 key rewards and 1 important warning sign.

Looking for more investment ideas?

If you stop with Baxter, you risk missing other opportunities that might suit your style, so take a few minutes to scan a broader set of ideas.

• Target higher quality at sensible prices by checking companies our screener tags as 51 high quality undervalued stocks with solid fundamentals already in place.
• Prioritize resilience first and see which businesses pass our tougher checks with a solid balance sheet and fundamentals stocks screener (40 results) that can support future plans.
• Get ahead of the crowd by reviewing a screener containing 23 high quality undiscovered gems that combines strong financials with lower market attention.

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.