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- GE HealthCare Technologies (NASDAQ:GEHC) traded lower on Monday after UBS lowered its rating to Sell from Neutral, citing a more cautious earnings outlook and a valuation level unsupported by its current growth trends.
- A softer order trajectory, challenging comparable sales, and a lack of pricing tailwinds make UBS forecasts for the company's 2024 revenue and adjusted EBIT 1% and 4% below consensus, respectively.
- Citing comments from peer Siemens Healthineers (OTCPK:SEMHF) (OTCPK:SMMNY), analyst Graham Doyle argues that if there are also headwinds to device installations in China, there will be a further 2.5% downside to the 2024 EBIT forecast.
- Arguing that the management's medium-term target to generate half of the group's revenue from the imaging business is unrealistic, the analyst sets his 2025–27E EBIT forecasts for GEHC at 6-8% below consensus.
- "We believe it will take several years of higher R&D before GEHC can credibly compete in the premium end of the imaging market," Doyle added, slashing his price target on the stock to $66 from $86 per share.
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