GEHC changes
Pick any two versions below to diff them.
- Price
- $69.57 → $82.60(+18.7%)
- Discount category
- Well below intrinsic value → Close to intrinsic value
- Next earnings
- Oct 28, 2026 → Jan 28, 2027
- Next earnings is estimate
- No → Yes
- About
- GE HealthCare makes medical imaging machines, imaging drugs and patient monitoring equipment for hospitals and clinics around the world. It has three segments. Advanced Imaging Solutions sells CT, MRI, X-ray, ultrasound and molecular imaging machines, with software and service contracts, and gave about removed: 71% added: 70% of revenue in removed: Q2 added: Q3 2026. Pharmaceutical Diagnostics sells contrast agents and radioactive tracers, such as Flyrcado, that doctors inject before a scan, and it has the highest margin. Patient Care Solutions sells patient monitors and other hospital removed: equipment, and it added: equipment. It lost money in Q2 added: 2026 and returned to profit in Q3 2026. Services and drugs give repeat revenue from the large installed base of machines. GE HealthCare became an independent company in a spin-off from General Electric in 2023. In March 2026, it bought Intelerad, an imaging software company, for about $2.3 billion.
- Thesis
- GE HealthCare trades at a discount because its profit grows more slowly than its orders, and the market doubts that it can convert removed: record added: its orders into higher margins and cash. In 2026, inflation in memory chips, oil and freight costs about $250 million, and in April 2026 the company lowered its profit and free cash flow outlook. China's volume-based buying and local competitors lower orders and prices there, and tariffs add cost. Patient Care Solutions lost money in Q2 2026, removed: and the company removed: now reviews strategic options for removed: it. added: it, and the head of the segment leaves on November 15, 2026. The CFO also changed twice in removed: two months. For added: 2026. The Q3 2026 report on October 28, 2026 was a first step. Organic revenue grew 6.2%, the removed: gap added: adjusted EBIT margin rose to removed: close, GE HealthCare must meet added: 16.6%, and free cash flow was $793 million. The company raised its 2026 guidance removed: of an adjusted EBIT margin of 15.4% to removed: 15.7%, adjusted EPS of removed: $4.80 added: $4.95 to removed: $5.00 added: $5.05 and free cash flow of removed: about added: more than $1.6 removed: billion, after added: billion. But organic orders grew only removed: $180 million of free cash flow in the first half. Record orders, up added: 4.0%, after 11.1% removed: organically in Q2 removed: 2026, added: 2026. For the gap to close, GE HealthCare must added: meet the raised guidance, the $23.7 billion backlog must turn into faster revenue growth in 2027, and the company must fix or sell Patient Care Solutions. The removed: first test is the Q3 2026 report on October 28, 2026. The next tests are the Q4 2026 report with the 2027 outlook, expected in removed: early added: late January 2027, and the result of the Patient Care Solutions review, which has no date. If margins and cash flow removed: recover, added: keep recovering, the gap can close over the next four to six quarters. The main risk is that inflation, China and tariffs keep margins flat while the company spends on new products.
- Risks
- Costs rise faster than prices. The company expects about $250 million of inflation from memory chips, oil, freight and other parts in 2026, and it lowered its profit outlook in April 2026. Tariffs on imported parts add removed: cost, and added: cost. Tariff refunds helped profit in 2026, but the removed: company does not expect added: timing and amount of more removed: material tariff refunds. added: refunds are not certain. In China, volume-based buying by the government and strong local competitors lower orders and prices. The company said in its Q2 2026 10-Q that these factors can continue to affect orders and revenue, and trade tension between the US and China can make this worse. Patient Care Solutions revenue fell 13.3% in Q2 2026, and the segment had an EBIT margin of minus 3.8%. added: In Q3 2026, its revenue grew 8.5% and its EBIT margin was 8.6%, but the head of the segment leaves on November 15, 2026. A sale or other strategic option can bring charges or a low price, and more losses lower group margins. Free cash flow was removed: only $180 added: about $973 million in the first removed: half added: nine months of 2026, against a full-year target of removed: about added: more than $1.6 billion. If removed: the second half added: Q4 2026 falls short, the company has less cash for debt repayment, buybacks and removed: acquisitions. added: acquisitions, such as the $945 million SOFIE Biosciences purchase. The CFO changed twice in 2026: Jay Saccaro left in August, and William Grogan started on September 14, 2026. A new CFO can change guidance practice or capital plans. added: The head of Patient Care Solutions also changes in November 2026.
- Balance sheet
- Cash: removed: $2.1B added: $2.9B Debt: $10.2B Net debt: removed: $8.1B added: $7.3B Interest cover: removed: 6.0× added: 6.2× Undrawn credit line: $3.5B Debt due within 12 months: removed: $2.0M added: $3.0M Last debt due: 2052 GE HealthCare had about removed: $10.15 added: $10.16 billion of debt principal at removed: June added: September 30, 2026: $9.5 billion of senior unsecured notes in nine series due from 2027 to 2052, removed: and $650 million drawn on a delayed-draw term loan that matures in March removed: 2029. Debt rose added: 2029, and removed: cash added: $12 million of other debt. The first note, $1.75 billion, is due on November 15, 2027. Cash, with restricted cash, fell added: to $2.85 billion from removed: $4.49 added: $4.51 billion at December 31, 2025, added: mainly because the company paid about $2.3 billion in cash for Intelerad on March 18, 2026. It borrowed $500 million on its 364-day credit line and $650 million on the term loan for the deal, then repaid the $500 million, and it also repaid a $500 million term loan at maturity. No amount was drawn on its revolving credit lines at removed: June added: September 30, 2026: $3.0 billion to March 2030 and $500 million to February 2027. Interest cover is operating income added: of $2,058 million divided by net interest and other financial charges of removed: $210 added: $332 million for the first removed: half added: nine months of 2026. added: Free cash flow was $793 million in Q3 2026. The company bought back removed: $200 added: $300 million of shares in removed: Q2 added: the first half of 2026 and none in Q3 2026, and $500 million of the program remained. added: It will pay $945 million in cash for SOFIE Biosciences when the deal closes, expected in the first half of 2027. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct 28, 2026: Q3 2026 results: margin and free cash flow. removed: Pending. added: Passed. Watch: An adjusted EBIT margin on track for 15.4% to 15.7% and strong free cash flow toward the $1.6 billion target pass; lower guidance or weak cash flow fails. removed: Feb added: Outcome: The adjusted EBIT margin rose to 16.6%, free cash flow was $793 million, and the company raised its 2026 adjusted EPS and free cash flow guidance. Jan 28, 2027 (estimate): Q4 2026 results and 2027 outlook. Pending. Watch: A 2027 outlook with faster organic revenue growth from the record backlog and a higher margin passes; flat margins or lower growth fail. 2027 (estimate): Result of the Patient Care Solutions strategic review. Pending. Watch: A sale or a plan that returns the segment to profit without large charges passes; continued losses with no decision fail.
- Recent events
- Oct added: 28, 2026: GE HealthCare reported Q3 2026 results. Revenue was $5.5 billion, up 7.2%, and organic revenue grew 6.2%, with growth in all segments. Organic orders grew 4.0%, the book-to-bill was 1.03, and backlog was $23.7 billion. The adjusted EBIT margin was 16.6%, up 180 basis points, and adjusted EPS was $1.34, up 25.1%. Patient Care Solutions revenue grew 8.5%, and its EBIT margin was 8.6%. Free cash flow was $793 million, including a $55 million tariff refund. The company raised its 2026 guidance to organic revenue growth of about 4.0%, an adjusted EBIT margin of 15.5% to 15.7%, adjusted EPS of $4.95 to $5.05 and free cash flow of more than $1.6 billion. Oct 28, 2026: GE HealthCare said that Jeannette Bankes, President and CEO of Patient Care Solutions, leaves for a CEO role at another public company. Her last day is November 15, 2026. Neal Sandy, head of product strategy and management in the segment, takes over on November 16, 2026. Oct 7, 2026: GE HealthCare said that it will report Q3 2026 results before the market opens on October 28, 2026, with a call at 8:30 a.m. ET. Oct 5, 2026: GE HealthCare agreed to buy SOFIE Biosciences, a US maker of PET radioactive tracers, for $945 million in cash. SOFIE has 15 US production sites and the US rights to FAPI-74, a tracer in Phase III trials. The deal will join Pharmaceutical Diagnostics. GE HealthCare expects to complete it in the first half of 2027, after regulatory approvals. Sep 22, 2026: GE HealthCare appointed Pascal Desroches, the CFO of AT&T, to its board from January 4, 2027. Aug 18, 2026: GE HealthCare appointed William Grogan, the CFO of Xylem, as CFO from September 14, 2026. Jul 29, 2026: GE HealthCare reported Q2 2026 results. Revenue was $5.3 billion, up 5.7%, and organic revenue grew 3.5%. Organic orders grew 11.1%, a record, and backlog was $23.9 billion. Adjusted EPS was $1.13, up 6.6%, with help from tariff refunds. Patient Care Solutions revenue fell 13.3% and the segment lost $26 million. The CEO said that the company reviews strategic options for Patient Care Solutions. The company kept its 2026 guidance. Jul 23, 2026: GE HealthCare said that CFO Jay Saccaro will leave for a role outside medical technology, and it named Controller George Newcomb interim CFO. It also gave preliminary Q2 2026 results and kept its 2026 guidance. Apr 29, 2026: GE HealthCare reported Q1 2026 results. Revenue was $5.1 billion, up 7.4%, but organic orders grew only 1.1%. A supplier problem in Pharmaceutical Diagnostics lowered profit. The company kept its revenue outlook but lowered its profit and free cash flow outlook because of higher costs for memory chips, oil and freight.