GE HealthCare Technologies Stock: Is GEHC Underperforming the Health Care Sector?

Chicago, Illinois-based GE HealthCare Technologies Inc. (GEHC) develops, manufactures, and markets products, services, and complementary digital solutions used in the diagnosis, treatment, and monitoring of patients. Valued at $38.1 billion by market cap, the company offers imaging, ultrasound, maternal, ventilator, and patient monitoring equipment, as well as performance management, cybersecurity, technical training, site planning, integrated asset optimization, and clinical network solutions.

Companies worth $10 billion or more are generally described as “large-cap stocks,” and GEHC perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the medical devices industry. GEHC solidifies its position as a market leader through its renowned brand and expertise in imaging and ultrasound technologies. With a strong emphasis on quality and reliability, and with a significant portion of its revenue from servicing, pharmaceutical diagnostics, and digital solutions, GEHC maintains financial stability that supports ongoing investments in innovation and sustainable growth.

Despite its notable strength, GEHC slipped 13% from its 52-week high of $94.80, achieved on Feb. 13. Over the past three months, GEHC stock has gained 11.3%, underperforming the Health Care Select Sector SPDR Fund’s (XLV) 12% gains during the same time frame.

In the longer term, shares of GEHC rose 16% on a six-month basis, outperforming XLV’s six-month gains of 15.5%. However, the stock dipped marginally over the past 52 weeks, underperforming XLV’s 4.9% returns over the last year.

To confirm the bullish trend, GEHC is trading above its 50-day moving average since early June, with some fluctuations. The stock has been trading above its 200-day moving average since late November. 

GEHC's underperformance is attributed to a strong U.S. dollar and inflationary pressures, as well as intense competition in medtech from rivals such as Koninklijke Philips N.V. (PHG) and Siemens Aktiengesellschaft (SIEGY). Moreover, tariff tensions, anti-dumping investigations, and product hold in Patient Care Solutions are weighing on profitability, while execution risks in AI integration and digital transformation add to concerns.

On Oct. 29, GEHC shares closed down by 2.5% after reporting its Q3 results. Its adjusted EPS of $1.07 surpassed Wall Street expectations of $1.05. The company’s revenue was $5.14 billion, surpassing Wall Street forecasts of $5.07 billion. GEHC expects full-year adjusted EPS in the range of $4.51 to $4.63.

In the competitive arena of medical devices, Koninklijke Philips N.V. (PHG) has taken the lead over GEHC, showing resilience with a 1.5% uptick over the past 52 weeks. Meanwhile, PHG’s solid 16% gains over the past six months were in line with the stock.

Wall Street analysts are reasonably bullish on GEHC’s prospects. The stock has a consensus “Moderate Buy” rating from the 20 analysts covering it, and the mean price target of $88.05 suggests a potential upside of 6.7% from current price levels.