Citi has revised its price target for GE HealthCare (GEHC, Financial), adjusting it from $105 to $86. This change follows the company's first-quarter performance. Despite being significantly affected by tariffs, Citi maintains a Buy rating for GEHC shares. The firm points out that while the company faces challenges due to tariffs, its core operations remain robust, with essential products in good standing. Furthermore, Citi highlights the company's potential to mitigate tariff impacts, which will largely depend on the finalized tariff rates.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for GE HealthCare Technologies Inc (GEHC, Financial) is $96.75 with a high estimate of $115.00 and a low estimate of $74.00. The average target implies an upside of 38.11% from the current price of $70.05. More detailed estimate data can be found on the GE HealthCare Technologies Inc (GEHC) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, GE HealthCare Technologies Inc's (GEHC, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
GEHC Key Business Developments
Release Date: February 13, 2025
- Revenue: $5.3 billion for Q4 2024, with organic growth of 2%.
- Service Revenue Growth: 6% increase on a reported basis in Q4 2024.
- Product Revenue Growth: 1% increase on a reported basis in Q4 2024.
- Adjusted EBIT Margin: 18.7% for Q4 2024, up 260 basis points year-over-year.
- Adjusted EPS: $1.45 for Q4 2024, up 23% year-over-year.
- Free Cash Flow: $811 million for Q4 2024, down $145 million year-over-year.
- Full Year Revenue: $19.7 billion for 2024, with 1% organic growth.
- Full Year Adjusted EBIT Margin: 16.3% for 2024, up 120 basis points year-over-year.
- Full Year Adjusted EPS: $4.49 for 2024, up 14% year-over-year.
- Backlog: $19.8 billion at the end of Q4 2024, up $700 million year-over-year.
- R&D Investment: $1.3 billion for 2024, representing 6.7% of sales.
- Pharmaceutical Diagnostics Growth: 9% organic growth in Q4 2024 with EBIT margin of approximately 33%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GE HealthCare Technologies Inc (GEHC, Financial) reported strong orders growth across all segments, with a robust backlog and the highest book-to-bill ratio since becoming a public company.
- The company delivered revenue growth driven by demand in Advanced Visualization Solutions and Pharmaceutical Diagnostics, particularly in the US market.
- GEHC achieved significant margin expansion, with an adjusted EBIT margin of 18.7% in the fourth quarter, up 260 basis points year-over-year.
- The company closed 50 enterprise deals globally in 2024, including a $1 billion Care Alliance with Sutter Health, contributing to a solid foundation for future growth.
- GEHC continued to advance its leadership in AI, increasing its AI-enabled FDA authorizations from 58 to 85 within a year, and made strides in cloud-based solutions development.
Negative Points
- Free cash flow decreased by $145 million year-over-year in the fourth quarter, attributed to inventory builds that are expected to be worked down in the first half of 2025.
- Organic revenue growth for 2024 was only 1%, with product revenue flat and service revenue growing by 3%, indicating slower growth compared to previous years.
- The company faced headwinds in the China market, impacting global sales growth by approximately 200 basis points in the fourth quarter.
- Patient Care Solutions segment experienced a decline in EBIT margin by 50 basis points due to inflation and portfolio mix, despite improved fulfillment.
- GEHC's guidance for 2025 reflects a cautious approach, with expected revenue growth of only 2% to 3%, considering potential challenges in the China market and US tariffs.
