GE Healthcare’s Intelerad Acquisition: Balancing Long-term Growth with Short-term EPS Dilution

J.P. Morgan analyst Robbie Marcus has maintained their neutral stance on GEHC stock, giving a Hold rating on November 17.

Robbie Marcus has given his Hold rating due to a combination of factors related to GE Healthcare Technologies Inc’s recent acquisition of Intelerad. The acquisition is expected to enhance GE Healthcare’s growth and EBIT margin in the long term, but it will initially dilute earnings per share by approximately 1% over the next year. However, management plans to mitigate this impact through cost efficiencies.
Additionally, the acquisition aligns with GE Healthcare’s strategic shift towards increasing its recurring revenue base, with Intelerad’s business model expected to contribute significantly to this goal. Despite the potential for growth, the short-term dilution of EPS and the need for regulatory approvals before the deal’s completion in 2026 contribute to the Hold rating, reflecting a balanced view of the company’s prospects.

In another report released on November 17, Bank of America Securities also maintained a Hold rating on the stock with a $82.00 price target.