• Baxter International (NYSE:BAX) is rolling out a new decentralized operating model after a challenging fourth quarter and full year.
• The company is separating its Kidney Care business and reshaping its board as part of a broad restructuring effort.
• Management is also working to streamline operations following margin pressure, operational issues, and a sizeable goodwill impairment.

Baxter International enters this restructuring phase with its shares at $19.79 and a difficult recent track record. The stock is down 8.9% over the past week, 34.6% over the past year, and 72.1% over five years, reflecting pressure on both performance and investor confidence. For existing and potential shareholders, these moves represent an attempt to reset how the company runs its businesses.

For you as an investor, the key question is how this new operating model and portfolio shift might change Baxter International's risk and return profile over time. The Kidney Care divestiture, board changes, and focus on accountability could affect capital allocation, earnings quality, and exposure to regulatory and market pressures. Monitoring execution milestones and updated financial targets may be useful as this overhaul progresses.

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Baxter International’s restructuring comes after a year where revenue reached US$11.24b but profitability weakened, with a full year net loss of US$957m and larger goodwill impairments of US$485m in Q4 2025. Management is responding with a leaner operating model, the Kidney Care sale to Carlyle, and rightsizing areas like IV Solutions, where it now sees lower demand as the new baseline. For investors, the key takeaway is that Baxter is aiming to shift from “volume at any cost” to more disciplined, business-level accountability, with each unit owning its profit and loss.

How This Fits Into The Baxter International Narrative

• The new decentralized model and portfolio pruning align with the narrative’s focus on efficiency gains and higher margin product lines, particularly in connected care and advanced surgery.
• Guidance for flat to 1% GAAP sales growth in 2026, combined with margin pressure from tariffs and product mix, challenges expectations of a smooth recovery in hospital usage and profitability.
• Rising short interest of 10.42% and ongoing quality issues with Novum IQ infusion pumps introduce sentiment and execution factors that are not fully reflected in the original narrative’s operational improvement theme.

Understanding what a company may be worth starts with understanding its story. Check out one of the top narratives in the Simply Wall St Community for Baxter International to help you think about what it could be worth to you.

The Risks and Rewards Investors Should Consider

• ⚠️ Debt is not well covered by operating cash flow, which can limit flexibility while Baxter absorbs restructuring costs and follows guidance for low single digit sales growth in 2026.
• ⚠️ Execution risk is elevated as Baxter removes a management layer, manages goodwill impairments, addresses Novum IQ issues, and targets a net leverage ratio around 3.0x in the context of flat organic sales expectations.
• 🎁 Trading at what Simply Wall St views as a discount to its fair value estimate and at what it describes as good value relative to peers such as Medtronic, Becton Dickinson, and Stryker may appeal to investors who are comfortable with a turnaround situation.
• 🎁 Analysts expect earnings and revenue to increase over time, supported by product launches, connected care initiatives, and efforts to strip out stranded costs following the Kidney Care divestiture.

What To Watch Going Forward

From here, it may be useful to watch whether Baxter can stabilize margins while working through higher cost inventory and the Novum infusion pump shipment hold, and whether the decentralized structure strengthens segment-level accountability rather than creating duplication. It may also be helpful to monitor 2026 guidance updates, including any changes to the flat to 1% sales outlook, progress on cost savings and debt reduction toward the 3.0x leverage objective, and how quickly issues in Pharmaceuticals and IV Solutions ease. Short interest trends and management commentary on hospital purchasing patterns can also inform views on whether the turnaround efforts are advancing or encountering additional challenges.

To stay informed on how the latest news shapes the investment narrative for Baxter International, visit the community page for Baxter International for ongoing updates on top community narratives.

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.