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The company, which was previously part of General Electric Company (GE) until the spin-off of GE Healthcare in January 2023, is a leading medical technology company focused on Medical Imaging (Imaging & Ultrasound account for approximately 75% of revenues).
“Rev acceleration thesis rests on pricing & innovation. FY23 contemplates 2-3% of pricing, & going fwd GEHC expects 1-2% of net pricing…with historical volume growth of ~4%, a positive price by itself could push revs to MSD,” said the firm.
R&D investment has increased by approximately 100 basis points and is projected to outpace revenue growth. Management is prioritizing NPI metrics to maintain revenue growth, and there is potential for significant upside with breakthrough technologies such as photon counting CT. In terms of margins, positive pricing and platforming initiatives (such as pooling purchasing and minimizing SKUs) could boost margins by 50-100 basis points on an annual basis, said the firm.
Currently, shares are trading nearly 2% higher.
By Davit Kirakosyan
