Core Viewpoint - GE HealthCare Technologies (GEHC) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on an upward trend in earnings estimates [1][2][4]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, influencing their buying and selling decisions, which in turn affects stock prices [3]. Company Performance Indicators - GE HealthCare is projected to earn $4.46 per share for the fiscal year ending December 2025, with no year-over-year change expected [7]. - Over the past three months, the Zacks Consensus Estimate for GE HealthCare has increased by 12.8%, reflecting a positive trend in earnings estimates [7]. Zacks Rating System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions [8][9].

Core Insights - The article compares GE HealthCare Technologies (GEHC) and Boston Scientific (BSX) to determine which stock is more attractive to value investors [1] Group 1: Zacks Rank and Earnings Outlook - Both GEHC and BSX currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] - The Zacks Rank emphasizes earnings estimates and revisions, which is crucial for identifying potential value opportunities [2] Group 2: Valuation Metrics - GEHC has a forward P/E ratio of 16.89, while BSX has a significantly higher forward P/E of 35.26, suggesting that GEHC may be undervalued [5] - The PEG ratio for GEHC is 2.27, compared to BSX's PEG ratio of 2.53, indicating that GEHC's valuation is more favorable when considering expected earnings growth [5] - GEHC's P/B ratio is 3.35, while BSX's P/B ratio is 6.92, further supporting the notion that GEHC is a better value option [6] Group 3: Value Grades - Based on the valuation metrics, GEHC has earned a Value grade of A, whereas BSX has received a Value grade of D, highlighting GEHC's superior value proposition [6]

Group 1 - GE HealthCare Technologies experienced a significant share price decline of 7.9% as of July 30th, indicating negative market sentiment towards the company [1] - The drop in share price occurred just before the market's final hour, suggesting a potential reaction to management's announcements or market conditions [1]

Core Insights - GE HealthCare (GEHC) reported second-quarter 2025 adjusted earnings per share (EPS) of $1.06, exceeding the Zacks Consensus Estimate of 91 cents by 16.5%, and showing a 6% year-over-year improvement [1][7] - The company raised its 2025 EPS forecast to a range of $4.43-$4.63, reflecting continued demand for its products and services [9][10] Revenue Details - GEHC reported revenues of $5 billion, a 3% increase year over year, with organic growth of 2%, surpassing the Zacks Consensus Estimate by 0.1% [2][7] - Total company orders increased 3% organically year over year, driven by strong performance in the U.S. market, particularly in Imaging and Pharmaceutical Diagnostics segments [2] Segmental Performance - **Imaging**: Revenues totaled $2.2 billion, up 2% year over year, with segment EBIT at $188 million, down 10% [3] - **Advanced Visualization Solutions**: Revenues reached $1.29 billion, a 3% increase year over year, with segment EBIT at $267 million, up 4% [3] - **Patient Care Solutions**: Revenues amounted to $778 million, a 1% increase year over year, with segment EBIT at $60 million, down 23% [4] - **Pharmaceutical Diagnostics**: Revenues totaled $729 million, up 14% year over year, with segment EBIT at $213 million, up 7% [4] Margins and Cash Flow - The net income margin was 9.7%, an increase of 80 basis points from the prior year, primarily due to productivity and pricing benefits [5] - Cumulative cash flow from operating activities at the end of the second quarter was $344 million, compared to $300 million a year ago [5] Financial Position - GEHC ended the second quarter with cash, cash equivalents, and investments of $3.76 billion, up from $2.47 billion in the previous quarter [8] - Total assets increased to $35.5 billion from $33.59 billion sequentially [8] 2025 Guidance - GE HealthCare raised its earnings and organic revenue guidance for 2025, now expecting adjusted EPS in the range of $4.43-$4.63, up from a previous range of $3.90-$4.10 [9][10] - The company anticipates organic revenue growth of 3%, an increase from the previously expected 2-3% [10]

GE HealthCare on Wednesday reported better second-quarter results than analysts had expected and lifted its outlook for the full year. https://t.co/vuhhiOmLis ...

Group 1 - GE HealthCare Technologies reported revenue of $5.01 billion for the quarter ended June 2025, representing a 3.5% increase year-over-year and a surprise of +0.66% over the Zacks Consensus Estimate of $4.97 billion [1] - The earnings per share (EPS) for the quarter was $1.06, compared to $1.00 in the same quarter last year, resulting in an EPS surprise of +16.48% against the consensus estimate of $0.91 [1] - Over the past month, GE HealthCare shares returned +2.3%, while the Zacks S&P 500 composite increased by +3.4%, with the stock currently holding a Zacks Rank 3 (Hold) [3] Group 2 - Revenue from Imaging was $2.2 billion, slightly below the average estimate of $2.21 billion, reflecting a year-over-year decrease of -15.1% [4] - Advanced Visualization Solutions (AVS) generated $1.29 billion, exceeding the estimated $1.27 billion, with a significant year-over-year increase of +56.6% [4] - Revenue from Pharmaceutical Diagnostics (PDx) was $729 million, surpassing the estimated $699.23 million, marking a year-over-year increase of +14.1% [4] - Patient Care Solutions (PCS) reported revenue of $778 million, slightly below the average estimate of $784.09 million, with a year-over-year change of +0.8% [4] - Other revenues were reported at $6 million, significantly lower than the estimated $10.29 million, representing a year-over-year decline of -33.3% [4]

Financial Performance - The company reported revenues of $5 billion in Q2 2025, with organic growth of 2%, at the high end of the expected range [10] - Service revenue grew by 7%, driven by global growth in new and existing customer agreements, while product revenue increased by 2% [10] - Adjusted EBIT margin was 14.6%, down 80 basis points year over year due to tariff impacts, partially offset by lean actions and volume [11] - Adjusted EPS was $1.06 per share, up 6% year over year, including approximately $0.08 impact from tariffs [12] - Free cash flow was $7 million, up $189 million compared to the prior year [12] Business Segment Performance - Imaging segment organic revenue was up 1%, driven by strong execution in EMEA and the U.S., offset by challenges in China [14] - Advanced Visualization Solutions saw organic revenue growth of 2% year over year, with EBIT margin increasing by 20 basis points [15] - Patient Care Solutions had flat organic revenue year over year, with EBIT margin declining by 240 basis points due to inflation and unfavorable portfolio mix [17] - Pharmaceutical Diagnostics delivered 5% organic growth, with EBIT margin declining by 200 basis points due to planned investments and FX headwinds [18] Market Performance - Orders growth was up 3% year over year, with a record backlog of $21.3 billion, up $2.2 billion year over year [11] - The U.S. market is experiencing a robust replacement cycle due to an aging installed base, while Europe shows recovery in capital decision-making [36][40] - China is seeing activity pick up, but the recovery is slower than expected, with a cautious outlook for the second half of the year [84][86] Company Strategy and Industry Competition - The company is focused on its Precision Care strategy, with significant wins in enterprise deals and collaborations [6][7] - The D3 strategy aims to bring world-class solutions to market, leveraging digital and AI technologies [8] - The innovation pipeline includes new product launches expected to drive growth and improve margins [32][110] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about customer investment and operational execution, despite a mixed macroeconomic landscape [10] - The company raised its organic revenue growth guidance for 2025 to approximately 3%, reflecting positive customer sentiment [24] - Tariff impacts are expected to decrease in 2026, with ongoing mitigation actions in place [22][48] Other Important Information - The company announced a share repurchase program of $1 billion and repurchased approximately $100 million of shares in Q2 [20] - The adjusted effective tax rate is expected to be in the range of 20% to 21% for the full year, an improvement from prior guidance [24] Q&A Session Summary Question: Capital environment across different regions - Management noted robust replacement cycles in the U.S. and recovery in Europe, while China is taking longer to recover [36][84] Question: Tariff mitigation actions - The company is implementing no-regret moves and restructuring the supply chain to mitigate tariff impacts [46][48] Question: Order book growth deceleration - Management acknowledged a deceleration in order growth but emphasized the importance of looking at longer-term trends [58][60] Question: Progress with Flurcato and barriers to adoption - Management is pleased with progress and is addressing barriers such as reimbursement cycle times [70][71] Question: China market outlook - Management sees activity picking up in China but is cautious about the pace of recovery [84][86] Question: Guidance for the rest of the year - Management is confident in the second half guidance due to strong order growth and backlog [90][92]

Financial Data and Key Metrics Changes - The company reported revenues of $5 billion in Q2 2025, with organic growth of 2%, at the high end of the expected range [10] - Adjusted EPS was $1.06 per share, up 6% year over year, despite approximately $0.08 impact from tariffs [12] - Free cash flow was $7 million, an increase of $189 million compared to the prior year [12] Business Line Data and Key Metrics Changes - Imaging segment organic revenue grew 1% year over year, driven by strong execution in EMEA and the U.S., but offset by challenges in China [14] - Advanced Visualization Solutions saw organic revenue increase of 2% year over year, with EBIT margin up 20 basis points due to productivity and volume [15] - Patient Care Solutions had flat organic revenue year over year, with growth in Monitoring Solutions offset by declines in Life Support Solutions [16] - Pharmaceutical Diagnostics delivered 5% organic growth, although EBIT margin declined 200 basis points due to planned investments and FX headwinds [18] Market Data and Key Metrics Changes - The U.S. market showed robust demand driven by an aging installed base and new clinical products, while Europe experienced recovery in capital decisions [40][41] - Emerging markets, particularly Indonesia and Latin America, showed positive activity, while the recovery in China is taking longer than expected [42] Company Strategy and Development Direction - The company is focused on its Precision Care strategy, with significant wins in enterprise deals and collaborations, including a $90 million deal with Ascension [7][8] - The D3 strategy aims to bring world-class solutions to market, leveraging digital and AI technologies [8] - The company is optimistic about future growth, driven by customer investment and operational execution [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding customer investment and operational execution, despite a mixed macroeconomic landscape [9] - The company raised its organic revenue growth guidance for 2025 to approximately 3%, reflecting positive customer sentiment [24] - Adjusted EBIT margin forecast for the full year is now between 15.2% and 15.4%, an increase from previous guidance [25] Other Important Information - The company announced a share repurchase program of $1 billion and repurchased approximately $100 million of its shares in Q2 [20] - The global tariff environment has improved, with the company implementing mitigation actions to reduce tariff impacts [22] Q&A Session Summary Question: Can you talk about the capital environment across different regions, U.S., Europe, and whether China's bottoming? - Management noted robust replacement cycles in the U.S. due to an aging installed base and strong demand for new clinical products, while Europe is recovering from previous pauses in capital decisions [36][40][42] Question: Can you elaborate on the actions the company is taking regarding tariffs? - The company is implementing immediate no-regret moves and longer-term restructuring of the supply chain to mitigate tariff impacts [46][49] Question: What are the drivers behind the order growth deceleration in Q2? - Management acknowledged that while Q2 order growth was 3%, it was below Q1 expectations, but emphasized the importance of looking at longer-term trends rather than quarterly fluctuations [56][58] Question: What feedback are you hearing from customers regarding Flurcato? - Management reported positive feedback on image quality and progress in expanding manufacturing capabilities, with a focus on improving reimbursement cycle times [64][70] Question: How should we think about the cadence for the rest of the year? - Management expressed confidence in the second half of the year, supported by strong order growth and backlog, with expectations for a stronger fourth quarter [88][90]

Company Performance - GE HealthCare Technologies (GEHC) reported quarterly earnings of $1.06 per share, exceeding the Zacks Consensus Estimate of $0.91 per share, and showing an increase from $1 per share a year ago, resulting in an earnings surprise of +16.48% [1] - The company posted revenues of $5.01 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.66%, and up from $4.84 billion year-over-year [2] - Over the last four quarters, GE HealthCare has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Performance and Outlook - GE HealthCare shares have declined approximately 0.6% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The company's current Zacks Rank is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $0.94 on revenues of $5.02 billion, and for the current fiscal year, it is $4.02 on revenues of $20.31 billion [7] Industry Context - The Medical - Products industry, to which GE HealthCare belongs, is currently ranked in the bottom 29% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact GE HealthCare's stock performance [5]

Financial Performance - Q2 2025 - Revenues reached $5 billion with 2% organic growth[10] - Organic orders grew by 3% year-over-year[10] - Adjusted EBIT was $729 million with a 14.6% margin, a decrease of 80 bps year-over-year[10] - Adjusted EPS was $1.06, a 6% increase year-over-year[10] - Free cash flow was $7 million, an increase of $189 million year-over-year[10] Segment Results - Q2 2025 - Imaging revenues were $2.204 billion, with organic revenue growth of 1%[16] - Advanced Visualization Solutions (AVS) revenues were $1.289 billion, with organic revenue growth of 2%[20] - Patient Care Solutions (PCS) revenues were $778 million, with organic revenue flat at 0%[24] - Pharmaceutical Diagnostics (PDx) revenues were $729 million, with organic revenue growth of 5%[29] Outlook and Tariffs - The company is raising its 2025 Adjusted EPS guidance to $4.43 - $4.63[9, 40] - The company expects a net tariff impact of approximately $265 million, or ~$0.45 per share[40] - The company has mitigated approximately 50% of gross tariffs[39] - The company is updating its 2025 organic revenue growth outlook to ~3%[44] - The company is updating its 2025 Adjusted EBIT Margin to 15.2% - 15.4%[44] - The company is updating its 2025 Free Cash Flow to at least $1.4 billion[44]