Baxter (NYSE:BAX) today issued long-term financial guidance that projects growth over the next three years.
Shares of BAX were up 1.5% at $74.98 per share in midday trading today in response to the news.
Deerfield, Illinois-based Baxter expects sales growth between 4% and 5% on a compounded annual basis from 2022 through 2025, with free cash flow conversion of more than 80% by 2025.
The company expects its $12.5 billion acquisition of Hillrom, completed in December 2021, to contribute up to $350 million in annual pre-tax cost synergies by 2025, with up to $200 million in incremental annual revenue synergies related to the Hillrom buy.
Baxter attributed such synergies to the impact of market expansion across the broader portfolio, plus new innovation fueled by the expanded capabilities the company obtains through the acquisition.
“Our 2025 outlook demonstrates confidence in our momentum across our expanded portfolio and pipeline, supported by our commitment to ongoing disciplined financial management,” Baxter EVP and CFO Jay Saccaro said in a news release. “Our strategic approach to capital allocation allows us to continue investing in innovation and growth while returning value to our investors, which is a crucial objective of our operating model.”