CA - GE HealthCare Technologies: Growth Prospects Remain Encouraging And Valuation Is Attractive

2024-03-25 04:20:33 ET

Summary

• GE Healthcare Technologies is expected to experience good revenue and margin growth due to a healthy backlog, improving backlog execution, and strong end-market demand.
• GEHC's revenue growth will be supported by pent-up demand for procedures, an optimistic outlook for medical sector capital investments in 2024, and an increasing need for AI and digitization in Medtech products.
• New product innovations and a tuck-in M&A strategy will also contribute to sales growth, and the company is trading at a significant discount to its peers.

Investment Thesis

GE Healthcare Technologies Inc. ( GEHC ) should continue to deliver good revenue and margin growth moving forward. The company's revenue growth should benefit from a healthy backlog of $19.1 billion exiting FY23 and improving backlog execution. In addition, continued strength in end markets thanks to pent-up demand for procedures, an optimistic outlook for the medical sector's capital investments in 2024, and secular trends from the increasing need for AI and digitization in Medtech products should also help the company in increasing revenue. Moreover, new product innovations and the company's tuck-in M&A strategy should also benefit sales growth....

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