We’re selling 95 shares of GE Healthcare at roughly $74. Following Wednesday’s trade, Jim Cramer’s Charitable Trust will own 1,150 shares of GEHC, reducing its weighting to 2.75% from 2.97%. The small trim we’re making in GE Healthcare with the stock up slightly in an otherwise rough tape does not change our belief in this medical equipment maker as a long-term play. The rollout of Alzheimer’s treatments and the integration of artificial intelligence into its products will lead to stronger pricing and higher margins. However, China has us worried right now. Outside of China, the story is strong. At their JPMorgan Healthcare Conference presentation earlier this month, management offered an upbeat view of the hospital capital expenditure environment in 2024 versus 2023. If hospitals have more of a wherewithal to invest in medical equipment, some of that will go to GE Healthcare. However, Philips , a GE Healthcare competitor, reported earnings earlier this week and said its order book fell 3% in the fourth quarter, mostly due to weakness in — you guessed it — China. To be fair, GE Healthcare’s outperformance in China, where orders were up year-over-year, was a reason why the stock jumped after its third-quarter earnings report back in October. GEHC 1Y mountain GE Healthcare 1 year Fast forward to the JPMorgan conference, GEHC said it has not seen a meaningful deterioration in its China operations, yet. The company is set to report its quarter next week. Additionally, it has been outperforming its competition on orders for several quarters now. Philips orders have been down for six quarters in a row, but GE Healthcare hasn’t seen that weakness yet. So why trim GEHC now? Heading into Tuesday’s print, we want to open some room in our position. We want to be ready just in case the stock gets dinged on a cautious guide due to China, or because management wants to start the year with a conservative view that they can beat through throughout the year. Reflecting our…
Read the full article here
Leave a Reply