Morningstar

GE Confidentially Files for IPO of Healthcare Unit

GE Healthcare's size would rank as one of the world's largest for a public healthcare company, but we're not making any changes to our fair value estimate on the news.

Securities In This Article
GE Aerospace
(GE)

Narrow-moat-rated

The public filing will probably be next spring, according to Bloomberg, potentially accelerating the timing of the healthcare separation by months from what we speculated. Private filings tend to cut down the time needed to IPO, but some of these considerations are offset by GE Healthcare’s size, which would rank as one of the world’s largest for a public healthcare company. We had already previously deleted all healthcare-related cash flows from 2020 onward in our model. We agree with news reports that see an enterprise value ranging from $65 billion to $70 billion based on comparable companies. We peg ours at the midpoint of the range, given the forward enterprise value/EBITDA multiple for peer Siemens’ Healthineers business, which was spun off in March (among other comps). Based on GE’s public statements in June, the company will assume about $27 billion in debt. About $18 billion of this debt will be related to borrowings and about $9 billion will be related to pensions, implying that GE Healthcare will have an equity valuation of about $40 billion.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

More in Stocks

This Cheap Stock Is Still a Buy Even After 50% Rally

Shares of this wide-moat company look 36% undervalued today.
Ivan Su

10 Top-Performing Dividend Stocks of Q3 2024

IBM and Entergy are among the quarter’s high-yielding winners.
Bella Albrecht

33 Undervalued Stocks

Here’s the new list of Morningstar’s top underpriced analyst picks to buy for the fourth quarter of 2024.
Susan Dziubinski

About the Author

Joshua Aguilar

Director
More from Author

Joshua Aguilar is a director, AM Resources, for Morningstar*. After previously covering multi-industrial conglomerates and financial services firm, he is now assuming coverage of exploration and production firms in the oil and gas industry.

Prior to joining Morningstar in 2016, Aguilar was a practicing business transactional attorney in Florida. Aguilar joined Morningstar in 2016 as an Associate on the Financials team, was promoted to Analyst on the Industrials team in 2018, and Senior Analyst in 2022. He’s also served as our Associates Coordinator since 2021 and led our diversity efforts as DEI co-chair since 2020. Aguilar has served as a key mentor to several Associates on their path to Analyst. He’s also hosted a Morningstar earnings townhall, participated in Analyzing MORN, and been a strong contributor through both client interactions and his GE stock call. Josh co-authored an Outstanding Research Achievement (ORA)-winning piece with Kris Inton on CEO compensation in 2021. He’s also taught the model to new hires for many years as part of the Valuation Committee.

Aguilar graduated Magna cum laude with a B.A. in political science and criminology from the University of Florida. He also has an MBA from Rollins College and a J.D. from Wake Forest University. Aguilar remains an active member of the Florida Bar Association.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

Sponsor Center