JP Morgan Updates Model On BAX

JP Morgan has issued a research report on Baxter International

to reflect the weakness compared to the Euro and the Yen. In the report, JP Morgan writes "For 2010, we forecast revenue of $13.03B (+3.7%, +2.1% constant currency) and EPS of $3.98 (+4.8%), which is at the top end of management's constant currency revenue guidance of +1-3% and EPS guidance of $3.93-$3.98. Given the movement in currency, we now project FX to be a 50bp drag on the top line in 4Q, which is 280bps better than our prior forecast, adding $97M to our sales projection. Compared to consensus, our full year forecasts are now $115M higher on the top line and $0.05 higher on the bottom line. The disconnect between our model and the Street is 1) the Octapharma recall and 2) more favorable FX, both of which will provide a tailwind for the company. As such, we expect Baxter to guide the Street closer to our forecasts when the company reports 3Q earnings on Thursday (October 21)." JP Morgan maintains its Neutral rating and has raised the price target from $55 to $61. Baxter International closed Friday at $48.76.