Wells Fargo is confident GE HealthCare can profit from the expansion of a key Alzheimer’s drug. The firm initiated coverage of the medical device provider with an obese rating and a $90 per share price goal. Wells Fargo’s forecast implies nearly 28% upside from Tuesday’s $70.54 close. Analyst Larry Biegelsen highlighted the expansion of Alzheimer’s drug Leqembi as a possible growth driver for GE HealthCare, provided that the treatment requires 4 MRI scans throughout the method. Leqembi received approval from the U.S. Food and Drug Administration on July 6 . “Based on our evaluation of the variety of patients on Alzheimer’s drugs within the US, EU and Japan, we estimate ~$47 mil of incremental revenues in 2024 (20 bps growth contribution) to GEHC, rising to ~$493 mil by 2027 (80 bps growth contribution) in our base case model where we assume that fifty% of the extra scans will probably be absorbed by existing capability,” Biegelsen said. Biegelsen added that the stock could also see an earnings per share compounded annual growth rate within the double digits as margins grow to 13.5% from 2023 to 2025. Shares of GE HealthCare have gained greater than 20% this yr. GEHC YTD mountain GE HealthCare yr so far — CNBC’s Michael Bloom contributed to this report.
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