Baxter International (BAX) is a game changer in the medical device space, as the data behind its IVIG for Alzheimer’s could send the stock up 10% or 15% in the first quarter, says Matt Miksic, Managing Director and Senior Research Analyst at Piper Jaffray & Co.
“Some of our ideas are just as simple as names that are tapping the geographic expansion and growth in emerging markets…certainly if they come through this year, they would drive some significant performance in the names involved. Baxter (BAX) and their IVIG opportunity for Alzheimer’s would be one of those,” Miksic said.
Miksic says that BAX will either go up 10% or 15% on the back of the Alzheimer’s data in the second quarter, or investors will see it slide a bit, possibly 3% to 5%, and this binary event will shape the outcome of the company over the next five years.
“In the case of…Baxter, we have an investment thesis that supports our view on the stocks, whether these things come through or not. The fundamentals of the stories support significantly outperforming our universe, hence our ‘overweight’ rating. Right now, probably $2 or $3 of Alzheimer’s is included in the stock’s current valuation, and that will go away if that project doesn’t work or is delayed. But we would be buyers on that news,” Miksic said.
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