GE HealthCare's Strong Q1 Took Back Seat To Tariffs, Analyst Sees 2026 Tariff Impact Less Than 2025

Core Insights - GE HealthCare reported Q1 2025 adjusted EPS of $1.01, exceeding the consensus estimate of 91 cents and up from 90 cents a year ago [1] - The company achieved sales of $4.78 billion, surpassing the consensus of $4.66 billion [1] - GE HealthCare updated its 2025 full-year guidance, reaffirming organic revenue growth of 2% to 3% year over year [1] Financial Performance - The adjusted EBIT margin is expected to be between 14.2% and 14.4%, a decrease from the previous guidance of 16.7% to 16.8% [2] - GE HealthCare experienced a record 10% organic order growth in Q1, although this was overshadowed by tariff concerns [2] Tariff Impact - The impact of tariffs for 2025 was larger than anticipated, but GE HealthCare has managed to offset over 50% of the gross headwind [3] - The company expects the tariff impact for 2026 to be less than in 2025, with potential offsets of $300 million or more, assuming an $800 million annualized tariff run rate [3] - Uncertainty remains regarding which tariffs may apply to Pharmaceutical Diagnostics (PDx) products, although many are likely produced in Europe, potentially avoiding the highest tariffs [4] Market Reaction - GE HealthCare's stock declined by 3.18% to $68.09 following the news [5] - BofA Securities maintains a Neutral rating due to tariff uncertainties, lowering the price target from $97 to $82 [6] - Wells Fargo rates GE HealthCare as Overweight, reducing the price target from $103 to $89 [6] - Citigroup maintains a Buy rating, lowering the price target from $105 to $86 [6] - Evercore ISI keeps an Outperform rating, adjusting the price target from $96 to $85 [6]