Author argues Baxter International looks cheap on free cash flow but is uncertain whether problems are short-term or structural.
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I'm new to looking at Baxter International. The multiples are extremely attractive. Estimated FCF/share for 2026 is at 4.60, which makes the current P/FCF less than 5. They have had a lot of hits recently, but most of them seem to be short-term. They had damage to their North Carolina manufacturing plant in 2024, safety concerns with Novum IQ Large Volume Pump leading to lowering forecasts, and now a number of lawsuits against the management after the share price fell off a cliff. These lawsuits usually get settled and only benefit the lawyers.
This is either a case of a solid company with poor management that may be on its way out, or perhaps just a lot of short-term woes they will soon recover from.
Am I missing anything else? Might the cash flow see more challenges in the 5 years ahead?