GE HealthCare is Well-Positioned To Capitalize On Alzheimer's Opportunity: Wells Fargo

Wells Fargo initiated coverage on GE HealthCare Technologies Inc GEHC with an Overweight rating and a price target of $90, seeing valuation as attractive vs. peers. 

The analyst notes a positive hospital capex survey for GE HealthCare.

The price target is based on ~15.0x EV/EBITDA on 2024E EBITDA of ~$3.2 billion. 

The analyst views the multiple as appropriate and believes that there is room for upward multiple revisions as GEHC makes progress on delivering toward its medium-term targets and views the hospital capex environment as stable in 2023 and improving in 2024. 

Wells Fargo also says that GE HealthCare is well-positioned to capitalize on the recent approval of Alzheimer's drugs, which should help drive demand for imaging equipment. 

Key downside risks include the following:

• Increased competition.
• Slower-than-expected uptake of new product launches and progress toward long-term targets.
• Inflationary and supply chain headwinds
• A slowdown in procedure volumes and capital equipment environment
• China volume-based procurement risk.

Price Action: GEHC shares are up 1.56% at $71.64 on the last check Wednesday.