In healthcare, as in most segments of the market, growth fixes or at
least papers over a lot of problems. Nobody really cares if the latest
hot tech company is producing lousy margins and has no clear path to
meaningful free cash flow - as long as the revenue growth is
eye-popping, that's good enough for a high multiple until the day of
reckoning comes into view.
For Baxter (NYSE:BAX), the split/spin-off of Baxalta (NYSE:BXLT)
leaves behind a company with solid market share in stable markets, but
management is going to have to roll up their sleeves and put in some
work to find growth opportunities and drive better margins. There is
certainly room for Baxter to do better in infusion pumps and renal care,
and biosurgery can be a decent business in the coming years, but the
market is already expecting a lot of improvements here in the years to
come.
Continue reading here:
Structurally Light On Growth, Baxter Has A Lot Of Work Ahead
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