Baxter Downgraded By Stifel On Soft Q2, Guidance Cut — But Retail Eyes A Rebound

Stifel downgraded Baxter International to ‘Hold’ from ‘Buy’ and slashed the price target to $25 from $36. 

The analysts revised their view following Baxter’s weak second-quarter (Q2) results, which also included a trimmed 2025 outlook and a cautious commentary on 2026 growth.

Adjusted earnings for the quarter were $0.59 per share, which missed the $0.61 consensus. Revenue of $2.81 billion slightly missed the $2.82 billion estimate. Baxter’s full-year guidance was also narrowed to $2.42 to $2.52 from $2.47 to $2.55.

CFO Joel Grade pointed to ongoing softness in demand for IV fluids, which are used to deliver medications or nutrients directly into a patient’s bloodstream, as a major drag on performance. "While we never want to lower expectations, our overall objective is reducing the outlook to capture more of the potential downside risks."

That softness stems from conservation practices implemented after Hurricane Helene damaged Baxter’s North Carolina production facility in 2024. 

While supply has since recovered, the company expects demand to remain about 20% below normal levels for the rest of 2025, which will continue to weigh on operating income and profit per share.

Stifel noted that Baxter’s disappointing Q2 results, lowered full-year guidance, and 2026 outlook have left the firm “feeling that the path to reliably-consistent mid-single-digit sales growth and more-meaningful margin expansion could take longer than previously thought.”

Additional pressure came from Baxter’s pharmaceuticals segment, where injectable drug sales declined 1% and anesthesia sales dropped by low double digits globally. 

The company also voluntarily halted shipments of its Novum IQ Large Volume Pump following reports of two deaths and multiple injuries.

On the positive side, Baxter lowered its projected tariff impact for 2025 to $40 million, down from a previous estimate of $60 million to $70 million.

Andrew Hider is set to take over as CEO in early September.

On Stocktwits, retail sentiment for Baxter was ‘extremely bullish’ amid ‘high’ message volume.

One user on Stocktwits opined that Baxter is a profitable company with potential tailwinds over the next six months. 

Another user said that they started a position in the stock, calling it “way oversold” following what they viewed as a minor earnings miss, adding that healthcare stocks have been under pressure lately but don’t expect that trend to last.

Baxter’s stock has declined 25% so far in 2025.

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