Analyst Travis Steed from Bank of America Securities maintained a Hold rating on GE Healthcare Technologies Inc and keeping the price target at $82.00.
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Travis Steed’s rating is based on GE Healthcare Technologies Inc’s recent acquisition of Intelerad for $2.3 billion, which is expected to enhance GEHC’s growth by 20 basis points. The acquisition is strategic as it brings a strong cloud solution to GEHC, which previously lacked in this area, and aligns with GEHC’s goal to expand its SaaS product offerings significantly by 2028. Despite the high acquisition cost, the recurring revenue and high margin from Intelerad’s products are seen as beneficial in the long term.
However, the deal is expected to be slightly dilutive to earnings per share initially, although GEHC plans to counteract this through internal cost efficiencies. The high acquisition multiple and the expected dilution to EPS might be reasons why Travis Steed has opted for a Hold rating, as these factors introduce a level of uncertainty regarding immediate financial benefits. The acquisition’s potential to accelerate GEHC’s cloud and AI capabilities, while promising, may take time to fully realize its impact on the company’s financial performance.
Steed covers the Healthcare sector, focusing on stocks such as Boston Scientific, Medtronic, and Penumbra. According to TipRanks, Steed has an average return of 7.2% and a 63.20% success rate on recommended stocks.