I believe BAX, at approximately $49/share offers value with a margin of safety on a cash flow valuation basis.
Baxter International focuses on delivering injectable therapies for a wide variety of medical conditions. The firm's BioScience segment specializes in developing treatments for disorders such as hemophilia and immune deficiencies. It also provides a variety of medication delivery systems including intravenous bags, solutions, and other devices to control fluid inflow, including dialysis equipment and solutions for patients with kidney failure. (Source: Morningstar.com)
Baxter Reports Sales and EPS for Fourth Quarter 2010 in Line with Guidance
I estimated the firm's WACC at 7.69% using the Capital Asset Pricing Model and the company's recent SEC filings. ValuePro has a baseline WACC calculator here and it calculates the firm's WACC at 6.83%. I'll go with the higher mark, 7.69%.
Recent free cash flows and noted growth rates:
Average Annual Growth: approx 18%
CAGR: approx. 14%
Consensus Forecast Industry 5-Year Growth: approx. 16% per year
Consensus Forecast Company 5-Year Growth: approx. 10% per year
Baxter International focuses on delivering injectable therapies for a wide variety of medical conditions. The firm's BioScience segment specializes in developing treatments for disorders such as hemophilia and immune deficiencies. It also provides a variety of medication delivery systems including intravenous bags, solutions, and other devices to control fluid inflow, including dialysis equipment and solutions for patients with kidney failure. (Source: Morningstar.com)
Baxter Reports Sales and EPS for Fourth Quarter 2010 in Line with Guidance
I estimated the firm's WACC at 7.69% using the Capital Asset Pricing Model and the company's recent SEC filings. ValuePro has a baseline WACC calculator here and it calculates the firm's WACC at 6.83%. I'll go with the higher mark, 7.69%.
Recent free cash flows and noted growth rates:
| Year | FCF $Millions |
| 2000 | 566 |
| 2001 | 362 |
| 2002 | 345 |
| 2003 | 636 |
| 2004 | 822 |
| 2005 | 1106 |
| 2006 | 1657 |
| 2007 | 1613 |
| 2008 | 1561 |
| 2009 | 1895 |
| 2010 | 2040 |
Average Annual Growth: approx 18%
CAGR: approx. 14%
Consensus Forecast Industry 5-Year Growth: approx. 16% per year
Consensus Forecast Company 5-Year Growth: approx. 10% per year
