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On Wednesday, Piper Sandler analyst Jason Bednar revised the price target for GE HealthCare stock (NASDAQ:GEHC), reducing it to $88 from the previous $104. Despite this adjustment, the analyst maintained an Overweight rating on the company’s shares, which currently trade at $61.65. According to InvestingPro analysis, the stock appears undervalued at current levels, with analyst targets ranging from $74 to $115.
Bednar’s assessment reflects concerns over the potential impact of tariffs and trade tensions on GE HealthCare’s earnings, particularly given the company’s significant revenue exposure in China and its involvement in sourcing. An ongoing anti-dumping investigation also adds to the uncertainties surrounding the company’s future earnings. The company, with its substantial market presence of $28.23 billion in market capitalization and $19.67 billion in annual revenue, faces these challenges while maintaining a P/E ratio of 19.67.
The analyst’s statement acknowledged the difficulty in quantifying the future earnings risk arising from these factors. He noted, "Unquestionably the stock with the most unquantifiable future earnings risk from tariffs/trade tensions (large China revenue exposure and sourcing, anti-dumping investigation), both with respect to direct and indirect effects."
Bednar also pointed out that the current market price appears to factor in a substantial reduction in guidance or a complete withdrawal of it. While he suggested that the recent sell-off in GE HealthCare shares might be excessive, he cautioned that purchasing the stock now would likely require a high tolerance for risk or a long-term investment outlook of more than a year.
The adjustment in price target comes at a time when investors are closely monitoring the impact of international trade policies on multinational companies, especially those with significant operations in China. GE HealthCare, as a global player in the healthcare sector, finds itself at the crossroads of these macroeconomic issues. The stock has declined nearly 31% over the past six months and currently trades near its 52-week low. For deeper insights into GE HealthCare’s valuation and growth prospects, InvestingPro subscribers can access comprehensive analysis and additional ProTips in the detailed Pro Research Report.
In other recent news, GE HealthCare has announced a cash dividend of $0.035 per share for the first quarter of 2025, payable to shareholders of record as of April 25. The company has also introduced its latest CT system, Revolution Vibe, at the American College of Cardiology 2025 meeting. This new system aims to enhance cardiac imaging technology and improve patient care with advanced features like Unlimited One-Beat Cardiac imaging and AI solutions. Meanwhile, the appointment of Jeannette Bankes as the new president and CEO of the Patient Care Solutions division is set to take effect on May 1, 2025, as she succeeds Tom Westrick.
In a challenging development, China has announced export restrictions on rare earth elements, impacting GE HealthCare’s supply chain, particularly for MRI scanners, which accounted for 46% of the company’s total sales in 2024. BTIG analyst Ryan Zimmerman maintains a Buy rating on GE HealthCare, despite these challenges, with a price target of $103.00. Zimmerman notes that the situation may evolve gradually, influenced by ongoing trade negotiations between the U.S. and China. Additionally, China has increased tariffs on U.S. imports and initiated an anti-dumping probe into medical CT tubes, further complicating the landscape for GE HealthCare. These recent developments highlight the complexities the company faces in navigating both technological advancements and international trade dynamics.
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