GE HealthCare Soars 8% in Market Debut, Targeting Small Deals According to Reuters

By Leroy Leo and Kannaki Deka

GE HealthCare Technologies Inc. experienced a notable rise in its shares, climbing as much as 8.4% during its inaugural trading day on the Nasdaq. The company’s CEO indicated plans for small acquisitions aimed at enhancing its cardiology and oncology divisions over the long term.

Upon opening, shares of the newly independent entity, spun off from the conglomerate GE, initially fell by 3% but ultimately closed up 8% at $60.49.

Recently, GE HealthCare has emerged as a strong performer for GE, and its new management is focused on leveraging this momentum as it operates independently, while GE retains a 19.9% stake in the unit.

"I think I’d be disappointed if we didn’t do some deals this year," stated Peter Arduini, the head of GE HealthCare, in an interview.

In 2021, GE announced its intention to divide into three public companies to rationalize its operations, reduce debt, and revitalize its stock, which had faced challenges. However, supply chain issues contributed to a decline of 11.3% in the conglomerate’s stock during 2022. On a more positive note, GE’s shares saw a 5% increase on Wednesday.

GE HealthCare encompasses four key medical device sectors: imaging and ultrasound technologies, patient care solutions, and pharmaceutical diagnostics, with imaging representing the largest segment. For the year up to the third quarter, which ended on September 30, this segment alone accounted for over half of the company’s total revenue, which reached $13.4 billion. The company is set to release its fourth-quarter results on January 30.

Notably, at the time of its listing, GE HealthCare’s enterprise value-to-operating profit ratio was approximately 40% lower than that of rival Siemens Healthineers, which went public in March 2018. Analyst Nicholas Heymann from William Blair expressed optimism, stating, "We would expect that this valuation gap would steadily shrink over time, benefiting GE Healthcare shareholders."