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Wells Fargo is confident GE HealthCare can benefit from the growth of a key Alzheimer’s drug. The firm initiated coverage of the medical device provider with an overweight rating and a $90 per share price target. Wells’ forecast implies nearly 28% upside from Tuesday’s $70.54 close. Analyst Larry Biegelsen highlighted the growth of Alzheimer’s drug Leqembi as a potential growth driver for GE HealthCare, given that the treatment requires four MRI scans throughout the process. Leqembi received approval from the Food and Drug Administration on July 6 . “Based on our analysis of the number of patients on Alzheimer’s drugs in 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 50% of the additional scans will be absorbed by existing capacity,” Biegelsen said. Biegelsen added that the stock could also see an earnings per share compounded annual growth rate in the double digits as margins grow to 13.5% from 2023 to 2025. Shares of GE HealthCare have gained more than 20% this year. GEHC YTD mountain GE HealthCare year to date — CNBC’s Michael Bloom contributed to this report.
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