Investing.com -- RBC Capital Markets initiated coverage of GE HealthCare Technologies with an Outperform rating and an $80 price target, arguing that the company's expanding portfolio of AI-enabled imaging, diagnostics and healthcare software products positions it for accelerating revenue and earnings growth over the next several years.

RBC said GE HealthCare's increased research and development spending since its 2023 separation from General Electric is translating into stronger order growth and a record $22 billion backlog, roughly equivalent to the company's expected 2026 revenue. The firm believes those indicators support faster growth beginning in late 2026 and into 2027.

The brokerage highlighted a broad pipeline of new products, including the Photonova Spectra photon-counting CT scanner, Omni Total Body PET/CT system, Flyrcado cardiac PET imaging agent, Vivid Pioneer ultrasound platform and CareIntellect clinical software suite. RBC estimates new product launches could contribute 100 to 200 basis points of revenue growth between 2026 and 2028.

RBC expects GE HealthCare to deliver organic revenue growth of 4% to 6% and high-single-digit to low-double-digit earnings growth over the medium term, supported by growing adoption of AI-enabled products, backlog conversion and a potential recovery in the Chinese market.

The firm also sees upside to current earnings forecasts, noting that management's guidance assumes elevated inflationary pressures persist throughout 2026. RBC said potential tariff refunds and lower-than-expected cost inflation could provide an earnings tailwind.

In addition, the brokerage pointed to the company's expanding recurring revenue base through services, software subscriptions and pharmaceutical diagnostics. GE HealthCare is targeting a long-term increase in recurring revenue to 60% of sales from roughly 50% currently.

RBC forecasts adjusted earnings per share of $4.91 in 2026 and $5.45 in 2027, slightly above Wall Street expectations, and believes the stock's valuation of about 11 times projected 2027 earnings does not fully reflect its growth prospects.

Shares of GE HealthCare have fallen about 26% year-to-date, but RBC said accelerating innovation, improving margins and continued capital returns, including share repurchases, could drive roughly 30% upside to its $80 price target.