Last Update 15 Oct 25
Fair value Decreased 1.18%Analysts have modestly lowered their price target for GE HealthCare Technologies from $88 to approximately $86.96 per share, citing incremental shifts in fair value and ongoing market uncertainties, such as evolving conditions in China and sustained concerns over order books. These factors are balanced by encouraging updates to the company’s product pipeline.
Analyst Commentary
Recent research updates reflect a balance of optimism and caution among market watchers regarding GE HealthCare Technologies. Analysts interpret new price targets and commentary as responses to a complicated macro backdrop, evolving global market dynamics, and strong internal execution.
Bullish Takeaways
- Bullish analysts continue to raise price targets as GE HealthCare delivers quarterly results ahead of expectations, highlighting resilient operational performance.
- The company’s robust product pipeline is repeatedly cited as a source of confidence in long-term growth and competitiveness.
- Upward revisions in guidance underscore management’s conviction in execution, despite short-term market headwinds.
- Recent increases in target valuations reflect confidence that the business remains well positioned to capture continued demand amid changing market conditions.
Bearish Takeaways
- Bears remain cautious about ongoing uncertainty in China, especially regarding policy challenges, anti-corruption measures, and an environment increasingly favoring domestic players.
- Some analysts are concerned that persistent pressures on order books and rolling pricing dynamics could continue to weigh on near-term revenue visibility.
- The prospect of a strategic pivot from certain international markets introduces incremental execution risk to the company’s longer-term growth narrative.
- Consolidation in valuation targets reflects a measured approach amid external uncertainties, with some analysts reiterating more neutral stances on the stock.
What's in the News
- GE HealthCare is considering options for its China business, including a potential sale of a stake. This could value the unit at several billion dollars (Bloomberg).
- Launched CareIntellect for Perinatal, a cloud-based SaaS platform that streamlines and improves maternal and fetal care by integrating clinical data for clinicians.
- Showcased real-world evidence for the End-tidal Control anesthesia delivery software, demonstrating significant reductions in anesthetic agent usage and greenhouse gas emissions at the University of Michigan.
- Unveiled the Carestation 850, a next-generation anesthesia delivery system designed to help clinicians adapt to rising demands and optimize patient care, with FDA submission and new international regulatory approvals.
Valuation Changes
- Consensus Analyst Price Target has decreased modestly from $88 to approximately $86.96 per share.
- Discount Rate has risen slightly from 8.05% to 8.07%.
- Revenue Growth projection has edged up, increasing from 4.34% to 4.38%.
- Net Profit Margin estimate has improved marginally from 11.04% to 11.06%.
- Future P/E ratio has declined from 20.16x to 19.89x.
Key Takeaways
- Expansion through partnerships and growing market share is likely to drive revenue growth and enhance revenue stability.
- New technologies and acquisitions in diagnostics are positioned to significantly boost future revenue and earnings.
- Tariffs and regulatory uncertainties may hinder earnings and revenue growth, with competitive pressures impacting market share and cash flow constraints limiting financial flexibility.
Catalysts
About GE HealthCare Technologies- Engages in the development, manufacture, and marketing of products, services, and complementary digital solutions used in the diagnosis, treatment, and monitoring of patients in the United States, Canada, and internationally.
- Expansion of market presence, driven by new partnerships with top IDNs and increased market share, is likely to boost future revenue growth.
- Ongoing mitigation strategies for tariff impacts, including supply chain optimization and local manufacturing shifts, are expected to enhance net margins and earnings.
- The pipeline of new high-impact products, like Radiopharmaceuticals, Total Body PET, and Photon Counting CT, is anticipated to drive future revenue growth and potentially improve margins.
- The focus on expanding recurring revenue, particularly in areas like digital solutions and advanced visualization, is expected to contribute positively to revenue stability and net margins.
- The launch of Flyrcado and recent acquisition activities are aimed at bolstering revenue streams in pharmaceutical diagnostics, which may contribute to overall revenue and earnings growth.
GE HealthCare Technologies Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming GE HealthCare Technologies's revenue will grow by 4.3% annually over the next 3 years.
- Analysts assume that profit margins will shrink from 11.2% today to 11.0% in 3 years time.
- Analysts expect earnings to reach $2.5 billion (and earnings per share of $5.51) by about September 2028, up from $2.2 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $2.0 billion.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 20.2x on those 2028 earnings, up from 16.0x today. This future PE is lower than the current PE for the US Medical Equipment industry at 29.7x.
- Analysts expect the number of shares outstanding to decline by 0.07% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 8.05%, as per the Simply Wall St company report.
GE HealthCare Technologies Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- The impact of tariffs, particularly between the U.S. and China, poses significant risk, with $0.85 impacting adjusted EPS, which could hinder margins and earnings.
- The uncertainty and potential regulatory changes in China, including antidumping investigations and rare earth export limitations, may impact revenue growth from this important market.
- The company faces challenges from competitor advancements in their product pipeline, which may put pressure on maintaining or increasing market share, affecting future revenues.
- Free cash flow has been reduced largely due to tariff impacts and inventory build, which may constrain operational liquidity and financial flexibility.
- While there is confidence in market demand, changes in the macroeconomic landscape, including global trade policies and foreign exchange volatility, can introduce significant earnings and margin risks.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $88.0 for GE HealthCare Technologies based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $106.0, and the most bearish reporting a price target of just $73.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $22.7 billion, earnings will come to $2.5 billion, and it would be trading on a PE ratio of 20.2x, assuming you use a discount rate of 8.0%.
- Given the current share price of $78.71, the analyst price target of $88.0 is 10.6% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
How well do narratives help inform your perspective?
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.