Baxter stock price forecast amid Hill-Rom acquisition rumours

The Baxter (NYSE: BAX) stock price will be in the spotlight on Monday as rumours of its Hill-Rom acquisition resurfaced. The stock closed at $73.97 on Friday, which was about 17% below the highest point this year.

Baxter’s Hill-Rom acquisition

Baxter is a leading conglomerate with a total market capitalization of more than $36 billion. The company provides a broad portfolio of products in the healthcare sector. Some of its key products are used in acute and chronic dialysis, sterile intravenous solutions, and surgical hemostats. The firm’s customers include key hospitals, nursing homes, and kidney dialysis centers.

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Baxter’s business has been on a growth path as the number of patients has risen globally. As a result, its total revenue has jumped from $10.15 billion in 2016 to more than $11.673 billion in 2020. Its net income has also risen to more than $1.1 billion. 

The Baxter stock price will be in focus on Monday after rumours of its acquisition of Hill-Rom resurfaced. According to the WSJ, the company is in advanced talks to buy Hill-Rom Holdings for about $10 billion. The negotiations are valuing the stock at about $150, which is substantially higher than its closing price of $132 on Friday.

Hill-Rom is a company that manufactures hospital equipment like beds and patient-monitoring products. The firm generates more than $2.88 billion in revenue and more than $233 million in net income.

The deal comes at a time when merger and acquisition (M&A) activity in the medical equipment industry has been increasing. The deals announced year-to-date in the industry are worth more than $400 billion. For example, recently, a group of PE firms acquired Medline for more than $30 billion 

Analysts have been relatively muted about the Baxter stock price recently. The most recent estimate happened early this month when Goldman Sachs lowered its target to $80. Analysts at KeyCorp, Stifel, and Barclays expect the shares will jump to more than $90.

Baxter stock price forecast

The daily chart shows that the BAX stock price has been in a bearish trend lately. Along the way, it has moved below the 25-day and 50-day moving averages. The shares have also formed a small double-bottom pattern, which is usually a bullish sign.

Still, with rumours of the big acquisition, there is a possibility that the stock will decline today. If this happens, the next key level to watch will be at $70.

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