GE HealthCare Shows Signs of Recovery Despite Initial Underperformance
With a market cap of $32 billion, Chicago-based GE HealthCare Technologies Inc. (GEHC) specializes in developing and marketing products, services, and digital solutions focused on patient diagnosis, treatment, and monitoring both in the United States and abroad.
Recent Performance Compared to the Market
Over the past year, GEHC has notably lagged behind the broader market. Its stock prices have decreased by 11.1% in the last 52 weeks and down 5.2% year-to-date (YTD). In contrast, the S&P 500 Index ($SPX) has gained 11.9% over the same timeframe, with only a slight drop anticipated in 2025.
Focusing on industry comparisons, GEHC’s performance has also fallen short of the Global X HealthTech ETF’s (HEAL) 17.7% gains in the past year and an 8.4% increase YTD.
Q1 Earnings Report
On April 30, GEHC shares increased by 3.3% following the announcement of its Q1 earnings. The company reported a total revenue of $4.8 billion, marking a year-over-year growth of 2.7%, which exceeded analysts’ expectations. Additionally, the adjusted EBIT margin expanded from 14.7% in the year-ago quarter to 15%. This led to a 5% year-over-year increase in adjusted EBIT, totaling $715 million. The adjusted net income also rose by 12.3% to $464 million, and adjusted EPS jumped 12.2%, reaching $1.01—an 11% beat against forecasts.
Outlook for Fiscal Year 2025
Looking ahead to the current fiscal year 2025, analysts expect GEHC to report a 10.5% decline in adjusted earnings to $4.02 per share. Nonetheless, the company has a strong record of beating earnings estimates; it has surpassed Street projections in each of the past four quarters.
Analyst Ratings
Currently, GEHC holds a consensus “Strong Buy” rating. Of the 18 analysts covering the stock, 13 have issued “Strong Buy” recommendations and five have given “Hold” ratings.
This outlook reflects a slight improvement compared to two months prior, when only 12 analysts recommended “Strong Buy” and one analyst assigned a “Strong Sell” rating.
On May 6, Morgan Stanley (MS) analyst Patrick Wood maintained a “Hold” rating on GE HealthCare but adjusted its price target down to $78.
Currently, GEHC’s mean price target stands at $88.06, indicating an 18.8% upside from current price levels. Meanwhile, the highest target of $110 presents a potential upside of 48.4%.
On the date of publication, Aditya Sarawgi 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.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
