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GE Spins Off HealthCare: What Happens Next

Jan. 09, 2023 3:28 PM ETGeneral Electric Company (GE), GEHC13 Comments


  • GE completed its long-awaited healthcare business spin-off last week.
  • This gets the company closer to its long-term plan to split up into three focused companies across power, health, and aviation.
  • I assess the outlook for both the independent healthcare company and the remaining GE business.
  • Looking for a helping hand in the market? Members of Ian's Insider Corner get exclusive ideas and guidance to navigate any climate. Learn More »
General Electric company logo on the headquarters building in Prague


Last week, General Electric (NYSE:GE) completed the long-anticipated spin-off of its healthcare division, GE HealthCare Technologies (NASDAQ:GEHC). This is a concrete step toward CEO Larry Culp's efforts to transform GE from a conglomerate into distinct

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Ian Bezek profile picture

Ian worked for Kerrisdale, a New York activist hedge fund, for three years, before moving to Latin America to pursue entrepreneurial opportunities there. His Ian's Insider Corner service provides live chat, model portfolios, full access and updates to his "IMF" portfolio, along with a weekly newsletter which expands on these topics.

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Comments (13)

I have shares of GE, and now GEHC, in a Shareowner account which I often forget about until I pull up the annual 1099-DIV for taxes. I bought when GE was $6-$12, knowing it would be an extended rough ride, but I think they're headed in the right direction for the long haul.
GE's 4Q and full Year 2022 EPS much better than headline number in the media. Should look at all the numerous non-recurring adjustments in presentation and do your own adjustments.

Look for EPS results to be better than GE guidance in 2023, due to higher profit margins than guidance. Aerospace is the driver to the better profit margin results.

Orders and backlogs look really good. FCF looks great. FCF should be much better in 2023 and beyond compared to GE's initial guidance. Profit margin expansion in Aerospace.

Analysts' questions on today's webcast were mostly surrounding Renewables. Missing big Aerospace picture.
Has there been any guidance on establishing a GEHC dividend or share repurchase program?
mk1992 profile picture
@Apple Eye GE cannot speak for GEHC, a separate independent company. Will need to wait minimum 1/30 GEHC ER for anything on that.
GEHC spin-off should be a winner. Long GEHC. They service 2 million installations at present with only Siemens as their main competitor
Sarwi Notoatmodjo profile picture
Yes..."Investors in GE stock received one share of GE HealthCare for each three shares they held of the parent company." However there is no explanation the arithmetic of its average price. Also arithmetic of the average price of the existing GE share... looking forward anybody to explaining a little bit on that.
@Sarwi Notoatmodjo It no longer matters how they got the valuations they did. Both entities are now trading and the markets will determine the values.
To much debt, and GE had to split up to keep it's name. The power division will fail and want government bail outs. GE received allot of pandemic money, they should get more government contract money this way as well.
Sarwi Notoatmodjo profile picture
@lyingtoourselves To all our fairness... GE has been cutting its debt of well over 90 billion in about last three years. I strongly believe that the splitting plans would turn out to be as expected...
mk1992 profile picture
@Sarwi Notoatmodjo GE up 12 days in a row, up 23%. RSI now at 84!!! That's how the market is viewing the GEHC spinoff. Enuf said.
I think aviation will definitely recover with all of the ba orders.
@G1949 since they control about 59% of aircraft engine market they should thrive over time
mk1992 profile picture
"$15 billion is a significant amount of debt and pension liabilities for a company with a market cap around $27 billion.........If nothing else, this large debt load is likely to significantly reduce GE HealthCare's ability to return capital to shareholders for the next few years."

I have a hard time seeing how you use a stock market valuation metric measured against a business metric to justify that? So if stock market values GEHC at 2x now, then it will be able to return capital? Sorry, that argument does not work for me.

Your 'large debt' needs to be measured against other hard business metric eg. sales, or FCF, to see if allows for a capital return to shareholders.
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