BAX
Baxter International Inc.
$25.70
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 140.0% above fair value
You pay
$25.70
Bear
$8.57
Fair
$10.71
Bull
$12.85
Bear
$8.57
-66.7%
$0.71 × 12x P/E
Fair
$10.71
-58.3%
$0.71 × 15x P/E
Bull
$12.85
-50.0%
$0.71 × 18x P/E
Adjust Assumptions
15.0x
0.71$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
36.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$25.00
Divergence from AlphaVal
57%
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 $25.00 (from 36 analysts). Our estimate is 57% 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