SEMHF - Siemens Healthineers: Softer Orders A Risk But The Story Remains Sound

2024-07-03 06:19:10 ET

Summary

• Healthcare capex demand has supported healthy order growth at Siemens Healthineers, as the company leverages new innovative platforms in Imaging (MRI, CT) and radiation oncology (Varian).
• The Street wants margin leverage and order growth in FQ3'24, and I think there's a good chance of getting both.
• Diagnostics still needs a lot of work to become more competitive, and a rumored sale/spin may be a better option.
• Imaging is looking strong as the company is still in the early days of practice-changing technologies like photon-counting CT.
• Revenue growth in the range of 5% to 6% and EBITDA margins of 20%+ can still support further gains.

Despite worries about hospital budgets, healthcare capex has held up pretty well over the last 18 months, and Siemens Healthineers ( OTCPK:SMMNY ) (SHLG.DE) has leveraged innovative new products into that healthy market to continue generating more than respectable revenue growth, albeit with some unexpected margin challenges along the way....

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