GE Healthcare has struggled this year, with shares down nearly 19% due to missed earnings expectations and a weak financial outlook attributed to supply constraints. However, Needham analyst David Saxon believes the stock is undervalued, as it appears to be pricing in a pessimistic scenario.
The firm anticipates that GE Healthcare will experience accelerated growth in its Advanced Imaging Solutions (AIS) segment by 2027, which could positively impact earnings forecasts.
Needham projects mid-single digit revenue growth and high-single digit earnings per share growth for the next year, with a price-to-earnings multiple of 17 times its 2027 estimates, compared to the current forward multiple of 12.6. This optimistic view aligns with the broader consensus among analysts, where 14 out of 21 recommend buying the stock