Price Forecast:

Bullish Case: BAX could recover as the resolution of Hurricane Helene's impact on supply chains improves operations, driving positive sentiment. Increased demand for dialysis products, emphasized by solid earnings projections, backs a bullish outlook.

Bearish Case: Ongoing legal issues, substantial volatility, and low trading volumes amplify downward pressures on BAX. Negativity from market opinion and unsettled supply chains overshadow any operational improvements.

Potential Outcomes:

• Price stability (30% probability): Recovery from supply issues but legal hurdles remain.
• Moderate price drop (50% probability): Continued legal challenges hinder recovery despite operational stability.
• Strong price surge (20% probability): Successful resolution of operational issues allows price recovery to $35.

Trading Oracle: Consider a bearish credit spread by selling $31.00 calls and buying $32.50 calls, given heightened implied volatility. With a potential return of 24% and favorable odds of 80% based on Helium's projections, this aligns with market sentiment that trends bearish in the near term.

December 13, 2024