ResMed (ASX:RMD) is still batting eyelashes at brokers, with Ord Minnett reaffirming its “Buy” rating following what it called a “solid” quarterly performance.
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The broker praised ResMed’s latest results report, noting that the company outperformed expectations. In response, Ord Minnett lifted its price target to $48.80, up from $45.60. With ResMed’s current share price sitting around the $44 mark, that implies potential upside of roughly 10% over the next 12 months.
So, what’s behind the analyst’s confidence in Week 34?
For one, Ord Minnett pointed to strong CPAP machine sales in the U.S., thanks to improvements in both the diagnostic process and machine setup, essentially getting the equipment from the clinic to the bedroom more efficiently.
There was also positive momentum in the masks business, which the broker described as “especially pleasing.”
That was helped by better distributor supply and the inclusion of two months of revenue from Virtuox, a recently acquired virtual diagnostic testing business.
According to Ord Minnett, ResMed remains “a compelling investment,” even amid the growing popularity of weight-loss drugs like Ozempic – which some investors believe could shrink the market for sleep apnoea devices.
“The sleep apnoea hardware and software equipment supplier remains an appealing investment option, and its U.S. industry talks show strong support from medical practitioners,” Ord Minnett wrote.
This is still a large addressable market,” the analyst also highlighted.
The takeaway?
ResMed’s core business is still performing, new acquisitions are adding value, and despite some headwinds, the long-term demand for sleep health solutions remains intact. With a newly raised target price and supportive commentary from one of the country’s top brokers, ResMed might just be one to watch.
RMD has been trading up at $44.60 in afternoon trade.
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