BAX
Baxter International Inc.
$25.28
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 136.0% above fair value
You pay
$25.28
Bear
$8.57
Fair
$10.71
Bull
$12.85
Bear
$8.57
-66.1%
$0.71 × 12x P/E
Fair
$10.71
-57.6%
$0.71 × 15x P/E
Bull
$12.85
-49.2%
$0.71 × 18x P/E
Adjust Assumptions
15.0x
0.71$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
35.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$23.60
Divergence from AlphaVal
55%
Summary
Applying a 15x P/E to adjusted EPS of $0.71, the base-case value is $10.71 per share.
Warnings
Wall Street's average price target is $23.60 (from 36 analysts). Our estimate is 55% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples