SEMHF - GE HealthCare draws Equal Weight rating at Morgan Stanley on valuation

2023-06-27 14:06:19 ET

Morgan Stanley initiated its coverage of GE HealthCare Technologies ( NASDAQ: GEHC ) with an Equal Weight rating and a $76 per share price target on Tuesday, referring to in-line estimates and valuations for the MedTech giant on Wall Street.

Arguing that the end-market for imaging has been generally non-cyclical, the analyst Patrick Wood points to strong Q1 numbers for GEHC’s capital-heavy peers such as Phillips ( PHG ), and Siemens Healthineers ( OTCPK:SEMHF ) ( OTCPK:SMMNY ).

Wood refers to a survey of healthcare providers to note that hospital executives have continued to focus on imaging-CAPEX, albeit at a lower level than in 2022.

"Overall then, we see the demand picture for GEHC in good shape and organic growth expectations of +4-5% as well underpinned," the analyst added.

On valuation, Wood notes that GE HealthCare ( GEHC ) is trading roughly on par with its radiology rival Siemens Healthineers ( OTCPK:SEMHF ) for 2027, with approximately a 5% discount on 2024 P/E and EV/EBITDA blend.

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