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Chicago, Illinois-based GE HealthCare Technologies Inc. (GEHC) develops, manufactures, and markets products, services, and complementary digital solutions used in the diagnosis, treatment, and monitoring of patients. Valued at $38.4 billion by market cap, the leading global medical technology company offers imaging, ultrasound, maternal, ventilator, and patient monitoring equipment, as well as performance management, cybersecurity, technical training, site planning, integrated asset optimization, and clinical network solutions.
Shares of this leader in precision care have underperformed the broader market over the past year. GEHC has gained 17.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 21.7%. In 2024, GEHC’s stock rose 8.9%, compared to the SPX’s 13.9% rise on a YTD basis.
Narrowing the focus, GEHC outperformed the iShares U.S. Medical Devices ETF (IHI). The exchange-traded fund has gained about 5.2% over the past year. Moreover, GEHC’s returns on a YTD basis outshine the ETF’s 3.8% gains over the same time frame.
On Jul. 31, GEHC shares closed up more than 2% after reporting its Q2 results. Its adjusted EPS of $1 surpassed Wall Street expectations of $0.98. The company’s revenue was $4.84 billion, falling short of Wall Street forecasts of $4.89 billion. GEHC updated full-year guidance for organic revenue growth in the range of 1% to 2% and adjusted EBIT margin in the range of 15.7% to 16%, an increase of 60 to 90 basis points. It reaffirmed its full-year adjusted EPS and expects it to be between $4.20 and $4.35.
For the current fiscal year, ending in December, analysts expect GEHC’s EPS to grow 8.4% to $4.26 on a diluted basis. The company’s earnings surprise history is impressive. It beat or matched the consensus estimate in each of the last four quarters.
Among the 17 analysts covering GEHC stock, the consensus is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, and seven “Holds.”
This configuration is more bullish than a month ago, with seven analysts suggesting a “Strong Buy.”
On Aug. 1, Morgan Stanley analyst Patrick Wood maintained a “Hold” rating on GEHC with a price target of $86, implying a potential upside of 2.2% from current levels.
The mean price target of $95.12 represents a 13% premium to GEHC’s current price levels. The Street-high price target of $110 suggests an upside potential of 30.7%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
