GEHC changes
Pick any two versions below to diff them.
- Price
- $70.40 → $69.01(−2.0%)
- Discount
- 11% to 28% → 13% to 29%(+2.0 pts)
- Next earnings
- 2026-10-29 → 2026-10-28
- Next earnings is estimate
- Yes → No
- Thesis
- GE HealthCare trades at a discount because its profit grows more slowly than its orders, and the market doubts that it can convert record 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, and the company now reviews strategic options for it. The CFO also changed twice in two months. For the gap to close, GE HealthCare must meet its 2026 guidance of an adjusted EBIT margin of 15.4% to 15.7%, adjusted EPS of $4.80 to $5.00 and free cash flow of about $1.6 billion, after only $180 million of free cash flow in the first half. Record orders, up 11.1% organically in Q2 2026, must turn into faster revenue growth in 2027, and the company must fix or sell Patient Care Solutions. The first test is the Q3 2026 report, expected at the end of on October 28, 2026. The next tests are the Q4 2026 report with the 2027 outlook, expected in early 2027, and the result of the Patient Care Solutions review, which has no date. If margins and cash flow recover, 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.
- Checkpoints
- Oct 2928, 2026 (estimate): Q3 2026 results: margin and free cash flow. Pending. 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. Feb 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
- 2026-10-07: 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. 2026-10-05: 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. 2026-09-22: GE HealthCare appointed Pascal Desroches, the CFO of AT&T, to its board from January 4, 2027. 2026-08-18: GE HealthCare appointed William Grogan, the CFO of Xylem, as CFO from September 14, 2026. 2026-07-29: 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. 2026-07-23: 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. 2026-04-29: 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.