weight loss & RMD ?, page-133

As much as I would like to take comfort in the technicals, they are looking horrible. No sign of support on RMD NYSE as of yet and ASX generally follows NYSE. I have mentally prepared myself for the stock price to go down to $100USD which would give the company a PE around 16 on current earnings. The company is still growing and regardless of the outcome of the obesity drug trials the company will continue to grow for the mid term so a year or 2 from now, EPS would be atleast 20 to 30% higher. On those future earnings which are pretty much guaranteed (due to lag between approvals and masses taking on new treatment), the company would be trading at a PE of around 12 at the stock price of $100USD. That would be the absolute base price for the stock (unless ofcourse EPS start going down!).

But that's all the downside. The upside thesis is negligible impact from these drugs or maybe even a net positive impact if you what Mick said in the interview recently plays out. If there is no impact to Resmed sales from these drugs it will further cement CPAP therapy as the best treatment available for treatment of sleep apnea.