{"schemaVersion":1,"research":true,"symbol":"bax","name":"Baxter International","topic":"moat","path":"/stock/bax/moat","status":"published","version":3,"updatedAt":"2026-10-18T01:04:09.826Z","locked":false,"publicFairValue":false,"fairValue":null,"moat":{"verdict":"none","summary":"The supplied passages support contractual demand visibility but do not establish a durable economic moat. Baxter's claimed manufacturing efficiencies, technology advantages and customer relationships lack demonstrated competitive differentiation or switching costs. Realized pricing competition, declining segment earnings, higher manufacturing costs and Novum pump recalls show competitive and operational weakness. Multi-year commitments provide some protection, but pricing discretion and resilience are limited. This conclusion does not imply that every Baxter product is interchangeable.","advantages":[{"mechanism":"switching_costs","claim":"Executed multi-year contracts provide current demand visibility, but the passages do not establish material customer switching costs. Remaining performance obligations were $7.91 billion at June 30, 2026, within Medical Products & Therapies.","durability":"Contracted revenue extends through 2030 and thereafter, subject to contractual performance. This supports a limited contractual advantage, without demonstrating durable renewal economics or customer lock-in.","risks":"GPO purchasing leverage, periodic agreement renewals and product quality problems can weaken customer relationships. The separate Kidney Care supply agreement includes early exit rights and has experienced reduced volumes.","invalidation":"The limited contractual protection would be undermined by material cancellations, returns or nonperformance. A switching-cost moat would require evidence of costly customer migration and sustained renewals on favorable terms; those facts are absent.","competitors":[],"evidenceIds":["e1","e2","e3","e4"],"counterEvidenceIds":["e5","e6","e7","e8"]},{"mechanism":"cost_advantage","claim":"Management claims cost advantages from shared manufacturing facilities, but no comparative unit costs or sustained relative cost leadership are demonstrated.","durability":"Current manufacturing infrastructure may support efficiencies, but its competitive durability is unproven. Recent operating results show cost pressure rather than demonstrated cost leadership.","risks":"Competitor capacity expansion, manufacturing and supply inflation, product mix and post-separation cost allocation can erode efficiencies. Recent gross-margin pressure partly reflects an accounting classification change, limiting interpretation.","invalidation":"Persistent manufacturing-cost pressure and segment earnings declines despite sales growth would further undermine the claimed advantage. Sustained, comparable evidence of lower delivered costs than competitors would be needed to establish it.","competitors":[],"evidenceIds":["e9"],"counterEvidenceIds":["e10","e11","e12","e13"]}],"evidence":[{"id":"e1","sourceId":"filing-2","location":"Revenue recognition / remaining performance obligations at June 30, 2026","excerpt":"As of June 30, 2026, we had $7.91 billion of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of more than one year, which are included in the Medical Products & Therapies segment."},{"id":"e2","sourceId":"filing-2","location":"Revenue recognition / expected recognition of remaining performance obligations","excerpt":"We expect to recognize approximately 10% of this amount as revenue over the remainder of 2026, 25% in 2027, 20% in each of 2028 and 2029, 15% in 2030 and the remainder thereafter."},{"id":"e3","sourceId":"filing-1","location":"Business / GPO purchasing agreements and renewals","excerpt":"We have purchasing agreements with several of the major GPOs in the United States, which are subject to renewal from time to time."},{"id":"e4","sourceId":"filing-2","location":"Revenue recognition / index-dependent contractual price increases","excerpt":"Some contracts in the United States included in this amount contain index-dependent price increases, which are not known at this time."},{"id":"e5","sourceId":"filing-1","location":"Business / negotiated GPO and IDN pricing","excerpt":"GPOs and IDNs negotiate pricing arrangements with manufacturers and distributors and the negotiated prices are made available to members."},{"id":"e6","sourceId":"filing-2","location":"Kidney Care divestiture / supply agreement duration and exit rights","excerpt":"Pursuant to the Kidney Care MSA, Baxter and the Kidney Care divested entities provide each other with certain dialysis-related products, other products, product components and fulfillment services for up to 10 years post-closing (with certain extension rights and early exit rights as provided therein)."},{"id":"e7","sourceId":"filing-2","location":"MD&A / reduced Kidney Care supply agreement volumes","excerpt":"The decrease in Other sales for the second quarter and six months ended June 30, 2026 as compared to the prior year periods is driven by reduced volumes under the Kidney Care MSA."},{"id":"e8","sourceId":"filing-2","location":"Contingencies / Novum LVP sales reductions, returns and remediation reserves","excerpt":"In 2025, we recorded estimates for sales reductions, for returns or exchanges of Novum LVP, and certain other charges, including estimates of reserves for remediation costs and inventory and contract asset write-downs associated with these Novum LVP corrections."},{"id":"e9","sourceId":"filing-1","location":"Business / management's manufacturing cost and technology advantage claims","excerpt":"We also benefit from efficiencies and cost advantages resulting from shared manufacturing facilities and the technological advantages of our products."},{"id":"e10","sourceId":"filing-1","location":"Competition / competitor manufacturing and distribution expansion","excerpt":"In addition, global and regional competitors continue to expand their manufacturing capacity and sales and marketing channels."},{"id":"e11","sourceId":"filing-2","location":"MD&A / gross-margin declines excluding special items","excerpt":"36 Excluding the impact of special items, the gross margin ratio decreased by 2.1 and 3.6 percentage points in the second quarter and first six months of 2026, respectively, compared to the prior year periods."},{"id":"e12","sourceId":"filing-2","location":"MD&A / manufacturing costs, inventory capitalization, mix and tariff refunds","excerpt":"The lower gross margins were primarily driven by increased manufacturing and supply costs, including an updated estimate of indirect costs previously recorded in SG&A now capitalized into inventory after the separation of our former Kidney Care business, and product mix, partially offset by IEEPA tariff refunds recorded in the second quarter of 2026."},{"id":"e13","sourceId":"filing-2","location":"Segment note / first-half 2026 sales, expenses and operating income","excerpt":"Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 (in millions) Medical Products & Therapies Healthcare Systems & Technologies Medical Products & Therapies Healthcare Systems & Technologies Net sales $ 2,076 $ 801 $ 1,945 $ 767 Cost of sales 1,331 402 1,157 375 Selling, general and administrative expenses 310 202 299 195 Research and development expenses 74 44 83 49 Other segment items (39) (10) (38) (8) Segment operating income $ 400 $ 163 $ 444 $ 156 Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 (in millions) Medical Products & Therapies Healthcare Systems & Technologies Medical Products & Therapies Healthcare Systems & Technologies Net sales $ 3,996 $ 1,506 $ 3,803 $ 1,471 Cost of sales 2,568 787 2,256 729 Selling, general and administrative expenses 605 384 601 385 Research and development expenses 145 92 166 95 Other segment items (72) (19) (67) (16) Segment operating income $ 750 $ 262 $ 847 $ 278 The following table presents our reportable segment operating income and reconciliations of reportable segment operating income to income (loss) from continuing operations before income taxes."},{"id":"e14","sourceId":"filing-1","location":"MD&A / 2025 Pharmaceuticals earnings decline and pricing competition","excerpt":"The decrease in segment operating income in 2025 was primarily due to higher allocation of corporate costs following the sale of our Kidney Care segment, pricing competition, unfavorable product mix and increased manufacturing and supply costs, partially offset by lower accruals under our annual employee incentive compensation plans."},{"id":"e15","sourceId":"filing-1","location":"Competition / realized consolidation-related pricing and market pressures","excerpt":"There has been consolidation in our customer base and by our competitors, which has resulted and continues to result in pricing and market pressures."},{"id":"e16","sourceId":"filing-1","location":"Risk factors / public tenders and government pricing controls","excerpt":"In much of Europe, Latin America, Asia, and Australia, governments provide healthcare at low cost to patients and control their expenditures by various means, such as purchasing products through public tenders, collective purchasing, regulating prices, setting reference prices in public tenders, and limiting reimbursement or patient access to certain products."},{"id":"e17","sourceId":"filing-2","location":"Cash-flow statement / operating cash generation, spending, debt repayment and dividends","excerpt":"Condensed Consolidated Statements of Cash Flows (unaudited) (in millions) Six Months Ended June 30, 2026 2025 Cash flows from operations Net income (loss) $ 111 $ 217 Less: Income (loss) from discontinued operations, net of tax (7) 31 Income (loss) from continuing operations 118 186 Adjustments to reconcile net income (loss) to cash flows from operations: Depreciation and amortization 476 504 Deferred income taxes (5) (165) Stock compensation 43 45 Net periodic pension and other postretirement costs (8) (16) Other long-lived asset impairments — 24 Other 22 20 Changes in balance sheet items: Accounts receivable, net (4) (40) Inventories (36) (279) Prepaid expenses and other current assets 81 10 Accounts payable 50 21 Accrued expenses and other current liabilities (232) (151) Other 5 (41) Cash flows from (used in) operations - continuing operations 510 118 Cash flows from (used in) operations - discontinued operations (12) (94) Cash flows from (used in) operations 498 24 Cash flows from investing activities Capital expenditures (253) (262) Acquisitions of developed technology and investments (3) (9) Other investing activities, net 6 32 Cash flows from (used in) investing activities - continuing operations (250) (239) Cash flows from (used in) investing activities - discontinued operations — 3,389 Cash flows from (used in) investing activities (250) 3,150 Cash flows from financing activities Repayments of debt — (3,505) Repayments of debt with original maturities of three months or less — (300) Cash dividends on common stock (10) (174) Proceeds from stock issued under employee benefit plans 13 16 Payments of contingent liabilities (31) — Other financing activities, net (14) (25) Cash flows from (used in) financing activities (42) (3,988) Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash - continuing operations (18) 88 Increase (decrease) in cash, cash equivalents and restricted cash 188 (726) Cash, cash equivalents and restricted cash of continuing operations at beginning of period (1) 1,968 2,414 Cash, cash equivalents and restricted cash of continuing operations at end of period (1) 2,156 1,688 (1) The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to the amounts reported within the condensed consolidated balance sheet as of June 30, 2026, December 31, 2025, and June 30, 2025 (in millions): June 30, 2026 December 31, 2025 June 30, 2025 Cash and cash equivalents $ 2,150 $ 1,966 $ 1,686 Restricted cash included in other non-current assets 6 2 2 Cash, cash equivalents and restricted cash $ 2,156 $ 1,968 $ 1,688 The accompanying notes are an integral part of these condensed consolidated financial statements."},{"id":"e18","sourceId":"filing-2","location":"Stockholders' equity / no first-half 2026 or 2025 share repurchases","excerpt":"During the first six months of 2026 and 2025 we did not repurchase any shares under this authority."},{"id":"e19","sourceId":"filing-1","location":"Goodwill / 2025 Front Line Care impairment","excerpt":"In connection with our annual goodwill impairment assessment in the fourth quarter of 2025, we recorded a $485 million goodwill impairment related to our Front Line Care reporting unit within our Healthcare Systems & 50 Technologies segment."},{"id":"e20","sourceId":"filing-1","location":"Goodwill / impairment drivers including lower forecast operating results","excerpt":"The reduction in value was primarily due to lower forecasted operating results, a higher discount rate and a lower terminal growth rate utilized in valuing this reporting unit which contributed to reduced expected future cash flows, as well as lower earnings multiples."},{"id":"e21","sourceId":"filing-3","location":"Compensation discussion / 2025 financial results versus incentive targets","excerpt":"HIDER, GRADE AND ROSENBLOOM Threshold 50% Target 100% Max 200% Achievement as a % of Target1 Baxter—Adjusted Net Sales From Continuing Operations (in millions)2 $11,283 76.0% 54% Weighted Financial Payout as a % of Target $10,982 $11,560 $12,138 Adjusted EPS From Continuing Operations3 $2.27 64.4% $2.12 $2.65 $3.18 Free Cash Flow From Continuing Operations (in millions)4 $438 0% $788 $985 $1,182 MR."},{"id":"e22","sourceId":"filing-3","location":"Governance / implemented executive stock retention requirements","excerpt":"Specifically, in response to the support received for a 2024 stockholder proposal, the Board amended Baxter’s stock ownership guidelines to implement additional executive stock retention requirements to better support achievement of the required holdings in the prescribed timeframe."},{"id":"e23","sourceId":"filing-3","location":"Executive compensation tables / CEO equity awards granted in 2025","excerpt":"Hider Annual Incentive(4) 759,375 1,518,750 3,796,875 RSU Grant #1(5) 9/2/2025 7/7/2025 131,813 3,185,920 RSU Grant #2(5) 9/2/2025 7/7/2025 236,237 5,709,848 Stock Option Grant(5) 9/2/2025 7/7/2025 465,651 24.17 3,185,053 2025 PSU Grant #1(5,6) 9/2/2025 7/7/2025 131,814 263,626 527,252 6,938,636 2025 PSU Grant #2(5,6) 9/2/2025 7/7/2025 82,170 164,339 328,678 4,325,402 2025 PSU Grant #3(5,6) 9/2/2025 7/7/2025 56,492 112,983 225,966 2,973,712 Mr."},{"id":"e24","sourceId":"filing-3","location":"Compensation discussion / 2025 individual performance assessments","excerpt":"Based on the strategic priority qualitative assessment described below, input from the independent members of the Board (in the case of the CEO’s individual performance assessment) and the CHC Committee (for all other applicable NEOs), the 2025 individual performance assessment for each NEO still employed by Baxter (based on the sum of the weightings of the related categories and resulting payouts) was 100%."},{"id":"e25","sourceId":"filing-3","location":"Governance / separation of Chair and CEO roles","excerpt":"In connection with Andrew's appointment, the Board determined it was the appropriate time to separate the roles of Chair of the Board and CEO, consistent with prior commitments made by the Board."},{"id":"e26","sourceId":"filing-3","location":"Governance / independent Chair responsibilities and authority","excerpt":"As Chair of the Board, Mr. Shafer has the following responsibilities and authority: •presiding at all Board executive sessions and all meetings of the Board; •facilitating discussion among the independent directors on key issues and concerns in executive sessions excluding management; •acting as principal liaison between the independent directors and the CEO; •reporting the results of and feedback from executive sessions to the CEO; •reviewing and approving meeting agendas for the Board and facilitating timely and appropriate information flow to the Board; •reviewing and approving meeting schedules to ensure that there is sufficient time for discussion of all agenda items; •having the authority to call meetings of the independent directors; •in consultation with the chair of the NCGPP Committee, leading the annual performance evaluation of the CEO; •in consultation with the chair of the NCGPP Committee, leading the CEO succession process; •engaging with Baxter’s stockholders on selected topics including corporate governance, executive compensation and other sustainability and corporate responsibility matters; •serving as the contact person for interested parties to communicate directly with the independent directors; and •performing such other duties as may be requested by the other independent directors."},{"id":"e27","sourceId":"filing-3","location":"Governance / annual director elections, refreshment and independence","excerpt":"As such, Baxter maintains annual director elections, regular refreshment including the appointment of three of our current independent directors over the last three years, a range of key skills represented on the Board consistent with its oversight responsibilities and strong Board independence."},{"id":"e28","sourceId":"filing-2","location":"Contingencies / FDA Class I classification of Novum LVP corrections","excerpt":"The U.S. Food and Drug Administration (FDA) classified these voluntary corrections as Class I recalls."},{"id":"e29","sourceId":"filing-2","location":"Contingencies / implemented corrections and additional work in early verification","excerpt":"We have implemented certain corrections related to these recalls and have identified additional corrections to address these recalls, some of which may require regulatory clearance or approval, and are in the early stages of verification testing."},{"id":"e30","sourceId":"filing-2","location":"Income statement / first-half 2026 sales and operating income","excerpt":"Condensed Consolidated Statements of Income (Loss) (unaudited) (in millions, except per share data) Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Net sales $ 2,960 $ 2,810 $ 5,661 $ 5,435 Cost of sales 1,928 1,819 3,738 3,583 Gross margin 1,032 991 1,923 1,852 Selling, general and administrative expenses 735 718 1,463 1,421 Research and development expenses 129 134 268 274 Other operating income, net (49) (52) (91) (92) Operating income 217 191 283 249 Interest expense, net 64 58 130 122 Other (income) expense, net (5) — 1 (3) Income (loss) from continuing operations before income taxes 158 133 152 130 Income tax expense (benefit) 23 11 34 (56) Income (loss) from continuing operations 135 122 118 186 Income (loss) from discontinued operations, net of tax (9) (31) (7) 31 Net income (loss) 126 91 111 217 Net income attributable to noncontrolling interests — — — — Net income (loss) attributable to Baxter stockholders $ 126 $ 91 $ 111 $ 217 Income (loss) from continuing operations per common share Basic $ 0.26 $ 0.24 $ 0.23 $ 0.36 Diluted $ 0.26 $ 0.24 $ 0.23 $ 0.36 Income (loss) from discontinued operations per common share Basic $ (0.02) $ (0.06) $ (0.01) $ 0.06 Diluted $ (0.02) $ (0.06) $ (0.02) $ 0.06 Income (loss) per common share Basic $ 0.24 $ 0.18 $ 0.22 $ 0.42 Diluted $ 0.24 $ 0.18 $ 0.21 $ 0.42 Weighted-average number of shares outstanding Basic 517 513 516 512 Diluted 518 514 517 514 The accompanying notes are an integral part of these condensed consolidated financial statements."},{"id":"e31","sourceId":"filing-2","location":"MD&A / reported gross-margin and expense ratios","excerpt":"Gross Margin and Expense Ratios Three Months Ended June 30, 2026 % of net sales 2025 % of net sales $ change % change Gross margin $ 1,032 34.9 % $ 991 35.3 % $ 41 4.1 % SG&A $ 735 24.8 % $ 718 25.6 % $ 17 2.4 % R&D $ 129 4.4 % $ 134 4.8 % $ (5) (3.7) % Six Months Ended June 30, 2026 % of net sales 2025 % of net sales $ change % change Gross margin $ 1,923 34.0 % $ 1,852 34.1 % $ 71 3.8 % SG&A $ 1,463 25.8 % $ 1,421 26.1 % $ 42 3.0 % R&D $ 268 4.7 % $ 274 5.0 % $ (6) (2.2) % Gross Margin Our gross margin ratio was 34.9% and 35.3% for the three months ended June 30, 2026 and 2025, respectively."},{"id":"e32","sourceId":"filing-2","location":"Segment reconciliation / segment earnings and special-item changes","excerpt":"Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Medical Products & Therapies $ 400 $ 444 $ 750 $ 847 Healthcare Systems & Technologies 163 156 262 278 Total reportable segment operating income 563 600 1,012 1,125 Other 6 6 13 12 Unallocated corporate costs (148) (183) (307) (322) Intangible asset amortization expense (145) (151) (291) (306) Legal matters — — — (11) Business optimization items (7) (17) (75) (62) Acquisition and integration items — (5) — (6) Separation-related costs (22) (14) (33) (27) European Medical Devices Regulation (4) (5) (8) (10) Business transformation (23) — (34) — Hurricane Helene costs (3) (17) (6) (115) Product-related items — (23) 12 (29) Total operating income 217 191 283 249 Interest expense, net 64 58 130 122 Other (income) expense, net (5) — 1 (3) Income (loss) from continuing operations before income taxes $ 158 $ 133 $ 152 $ 130 28 Additional financial information for our segments is as follows: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Depreciation Expense Medical Products & Therapies $ 72 $ 80 $ 143 $ 149 Healthcare Systems & Technologies 15 19 30 35 Total segment depreciation expense 87 99 173 184 Unallocated corporate depreciation expense 7 7 12 14 Total depreciation expense $ 94 $ 106 $ 185 $ 198 Our CODM does not receive asset information by reportable segment and, accordingly, we do not report that information for our segments."}],"changes":["No comparable previous version; previous accepted analysis is null."],"limitations":["Assessment uses only the supplied passages. Source dates are filing dates: filing-1, February 12, 2026; filing-2, July 30, 2026; filing-3, March 23, 2026. No later operating developments are established.","No companies are identified as competitors in the competition passages. Named customers, counterparties, acquisition entities and compensation advisers are not treated as competitors.","Manufacturing efficiency, technological superiority and relationship advantages are issuer assertions without comparative cost data, market shares, patent economics or demonstrated migration costs.","Remaining performance obligations demonstrate commitments, not guaranteed revenue, renewal rates or an inability to switch suppliers. Their balance cannot establish customer attrition without a bookings and recognition reconciliation.","No realized company-wide price bridge is supplied. The numerical realized-pricing assessment relies on disclosed adverse pricing outcomes, especially in 2025 Pharmaceuticals, and is not extrapolated uniformly across the later segment presentation.","Financial results and implemented governance disclosures support numerical grades, but all sources are issuer filings. Interim 2026 financial statements are unaudited, and the passages do not establish exceptional durability.","Proxy disclosures establish granted awards and adopted retention requirements, but do not establish comprehensive executive beneficial ownership, realized vesting or the effectiveness of alignment. Proposed plan provisions and future awards are not treated as adopted or vested.","The supplied operating and segment presentations differ across periods; direct comparisons are confined to comparative figures disclosed together. Gross-margin pressure includes mix and accounting effects, so it is not attributed solely to weak pricing."],"qualityAssessments":[{"category":"moat","checks":[{"criterion":"structural_advantage","grade":1,"rationale":"Multi-year commitments provide some commercial protection, but manufacturing advantages remain asserted and are not supported by comparative cost leadership. Current cost pressure and declining segment earnings weaken the structural case.","evidenceIds":["e1","e9","e12","e13"]},{"criterion":"durability","grade":1,"rationale":"Contracted recognition extends beyond 2030, but renewals, exit rights and competitive pricing constrain the protection. The separate Kidney Care agreement illustrates long contractual duration with early exit provisions, rather than assured lock-in.","evidenceIds":["e2","e3","e6","e15"]},{"criterion":"customer_dependency","grade":2,"rationale":"Executed obligations and ongoing supply arrangements demonstrate customer commitments. Dependency is assessed indirectly from contracts; no migration costs or renewal rates are disclosed, while Novum returns and lower Kidney Care volumes show limits.","evidenceIds":["e1","e6","e7","e8"]},{"criterion":"erosion_resilience","grade":1,"rationale":"Sales growth and contracted demand provide support, but manufacturing pressure, lower segment earnings and actual Class I recalls demonstrate fragile resilience. These are realized problems rather than hypothetical risk factors.","evidenceIds":["e1","e13","e28","e29"]}]},{"category":"pricing_power","checks":[{"criterion":"realized_pricing","grade":1,"rationale":"Baxter attributes part of the 2025 Pharmaceuticals earnings decline to pricing competition and reports consolidation-related pricing pressure. These establish weak observed pricing outcomes, although the passages do not quantify net price changes or establish uniform weakness across products.","evidenceIds":["e14","e15"]},{"criterion":"retention","grade":2,"rationale":"Retention is assessed indirectly from substantial executed multi-year commitments and ongoing supply revenue. This is balanced by reduced Kidney Care volumes and Novum return or exchange provisions; no retention rate is inferred.","evidenceIds":["e1","e2","e7","e8"]},{"criterion":"margin_resilience","grade":1,"rationale":"Reported first-half gross margin was nearly stable, but substantially smaller special-item burdens masked a 3.6-point decline excluding special items. Segment earnings also declined despite sales growth. Cost, mix and inventory-accounting effects limit any pricing-specific attribution.","evidenceIds":["e11","e12","e13","e31","e32"]},{"criterion":"contractual_freedom","grade":1,"rationale":"Negotiated GPO and IDN prices, government tenders and price controls constrain discretion. Some contracts permit index-dependent increases, providing limited contractual protection without proving unilateral pricing freedom or realized increases.","evidenceIds":["e4","e5","e16"]}]},{"category":"strong_management","checks":[{"criterion":"capital_discipline","grade":2,"rationale":"First-half 2026 continuing operating cash flow of $510 million exceeded $253 million of capital expenditures. Substantial 2025 debt repayments, lower dividends and no repurchases support financial restraint. Impairments and the 2025 cash-flow target shortfall offset these achievements; the evidence does not establish strong long-term allocation returns.","evidenceIds":["e17","e18","e19","e20","e21"]},{"criterion":"incentive_alignment","grade":2,"rationale":"Implemented stock retention requirements, actual 2025 equity grants and a zero payout on the missed cash-flow component provide alignment evidence. Individual assessments remained at 100% despite weak financial achievement. Grants are not treated as vested ownership, and comprehensive ownership and award outcomes are missing.","evidenceIds":["e21","e22","e23","e24"]},{"criterion":"execution","grade":1,"rationale":"Execution remains weak given missed 2025 financial targets, actual Class I recalls and incomplete remediation. First-half 2026 cash generation, sales and consolidated operating income improved, but segment earnings fell. This evaluates company outcomes across the leadership transition, without assigning all historical failures to the current CEO.","evidenceIds":["e13","e17","e21","e28","e29","e30"]},{"criterion":"governance","grade":2,"rationale":"Implemented Chair and CEO separation, defined independent Chair authority, annual elections and additional stock retention requirements provide substantive governance protections. Product-quality failures and continuing remediation limit confidence in oversight effectiveness; disclosed structures alone do not establish exceptional governance.","evidenceIds":["e22","e25","e26","e27","e28","e29"]}]}],"qualityPolicy":"quality-scores-2","basisHash":"7f51b5b33ee04af8d73c4a6d72c0363033e592389b05222a93c44f06a8c6df5e","updatedAt":"2026-10-18T01:04:09.826Z","sources":[{"id":"filing-1","url":"https://www.sec.gov/Archives/edgar/data/10456/000162828026007733/bax-20251231.htm","publishedAt":"2026-02-12","sha256":"c50d9461033f01ea4a14b4605dc8e34d4f5ed55a04e7b482a490792757e67959","dateKind":"filed"},{"id":"filing-2","url":"https://www.sec.gov/Archives/edgar/data/10456/000162828026051118/bax-20260630.htm","publishedAt":"2026-07-30","sha256":"b51a4cb799be7567f3ca8641d363a40057777ea86da33cb750e7df0a2b867a6a","dateKind":"filed"},{"id":"filing-3","url":"https://www.sec.gov/Archives/edgar/data/10456/000162828026020330/bax-20260320.htm","publishedAt":"2026-03-23","sha256":"a6f5e5c9c10ee252474d8a02563dbe8c1e948bf832d70d0ff52cf358dfcf22bb","dateKind":"filed"}],"model":"gpt-6.1-sol","providerId":"codex:6c610bbba529d7a9f6cc904347f0b700a7a0c511cb4e0cee985bffff9d90f84a","usage":{"input_tokens":55581,"cached_input_tokens":20992,"cache_write_input_tokens":0,"output_tokens":3798,"reasoning_output_tokens":126}},"signals":[{"period":"2021","end":"2021-12-31","values":{"gross_margin":39.93272841051314,"operating_margin":13.376095118898624,"roic":8.562962473733887,"fcf_margin":11.569148936170212,"sbc_revenue":1.1420525657071339},"issues":{"software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","roic_wacc":"Enter a WACC assumption from 0 to 100%."}},{"period":"2022","end":"2022-12-31","values":{"gross_margin":35.71097730430755,"operating_margin":-12.856481175147225,"roic":null,"fcf_margin":3.520148216767022,"sbc_revenue":1.0189902732746643},"issues":{"pe":"Trailing earnings is zero or negative, so this ratio is undefined.","peg":"TTM earnings per diluted share growth is zero or negative; a growth-adjusted multiple requires positive growth.","pfcf_growth":"TTM FCF per diluted share growth is zero or negative; a growth-adjusted multiple requires positive growth.","ev_ebitda":"Trailing EBITDA is zero or negative, so this ratio is undefined.","software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","roic":"NOPAT is undefined under this method: pretax profit must be positive and the effective tax rate must be between 0 and 100%.","roiic":"Invested capital did not increase versus the prior year. ROIIC requires a positive increase.","roic_wacc":"Enter a WACC assumption from 0 to 100%.","net_debt_ebitda":"Trailing EBITDA is zero or negative, so this ratio is undefined."}},{"period":"2023","end":"2023-12-31","values":{"gross_margin":33.58536420711537,"operating_margin":2.632822520758793,"roic":null,"fcf_margin":6.980355093498954,"sbc_revenue":0.8978599878485115},"issues":{"peg":"Prior-year TTM earnings per diluted share is zero or negative; a growth-adjusted multiple is undefined.","software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","roic":"NOPAT is undefined under this method: pretax profit must be positive and the effective tax rate must be between 0 and 100%.","roiic":"Invested capital did not increase versus the prior year. ROIIC requires a positive increase.","roic_wacc":"Enter a WACC assumption from 0 to 100%."}},{"period":"2024","end":"2024-12-31","values":{"gross_margin":37.45769086122602,"operating_margin":0.1316284317412561,"roic":null,"fcf_margin":5.38736367055284,"sbc_revenue":1.0718315156073712},"issues":{"pe":"Trailing earnings is zero or negative, so this ratio is undefined.","peg":"TTM earnings per diluted share growth is zero or negative; a growth-adjusted multiple requires positive growth.","pfcf_growth":"TTM FCF per diluted share growth is zero or negative; a growth-adjusted multiple requires positive growth.","software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","roic":"NOPAT is undefined under this method: pretax profit must be positive and the effective tax rate must be between 0 and 100%.","roiic":"Invested capital did not increase versus the prior year. ROIIC requires a positive increase.","roic_wacc":"Enter a WACC assumption from 0 to 100%."}},{"period":"2025","end":"2025-12-31","values":{"gross_margin":30.05158306652437,"operating_margin":-2.7392387050871574,"roic":null,"fcf_margin":2.9526858769121307,"sbc_revenue":1.040554962646745},"issues":{"pe":"Trailing earnings is zero or negative, so this ratio is undefined.","peg":"Prior-year TTM earnings per diluted share is zero or negative; a growth-adjusted multiple is undefined.","pfcf_growth":"TTM FCF per diluted share growth is zero or negative; a growth-adjusted multiple requires positive growth.","software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","roic":"NOPAT is undefined under this method: pretax profit must be positive and the effective tax rate must be between 0 and 100%.","roiic":"Invested capital did not increase versus the prior year. ROIIC requires a positive increase.","roic_wacc":"Enter a WACC assumption from 0 to 100%.","buybacks":"The reported inputs required for this metric are unavailable in the extracted statements for this period."}}],"sources":[{"id":"filing-1","url":"https://www.sec.gov/Archives/edgar/data/10456/000162828026007733/bax-20251231.htm","publishedAt":"2026-02-12","sha256":"c50d9461033f01ea4a14b4605dc8e34d4f5ed55a04e7b482a490792757e67959","dateKind":"filed"},{"id":"filing-2","url":"https://www.sec.gov/Archives/edgar/data/10456/000162828026051118/bax-20260630.htm","publishedAt":"2026-07-30","sha256":"b51a4cb799be7567f3ca8641d363a40057777ea86da33cb750e7df0a2b867a6a","dateKind":"filed"},{"id":"filing-3","url":"https://www.sec.gov/Archives/edgar/data/10456/000162828026020330/bax-20260320.htm","publishedAt":"2026-03-23","sha256":"a6f5e5c9c10ee252474d8a02563dbe8c1e948bf832d70d0ff52cf358dfcf22bb","dateKind":"filed"}],"history":[{"version":3,"updatedAt":"2026-10-18T16:35:43.872Z","verdict":"none","value":null},{"version":2,"updatedAt":"2026-10-18T02:27:49.793Z","verdict":"none","value":null},{"version":1,"updatedAt":"2026-10-18T02:18:02.026Z","verdict":null,"value":null}],"hasRequested":false,"requestStatus":"completed","researchIssue":null,"archivedMoat":null,"scope":"supported_catalog"}