Rothschild Redburn Starts ResMed (RMD) at Neutral

Rothschild Redburn analyst Jackson Philips initiates coverage on ResMed (NYSE: RMD) with a Neutral rating and a price target of $230.00.

The analyst comments: “Resmed is the market-leading provider of a gold standard treatment in an underpenetrated obstructive sleep apnoea (OSA) market. We see a potential volume runway for continuous positive airway pressure (CPAP) as a treatment for OSA, but structural barriers remain, and we note inflection is dependent on several swing factors including the impact of glucagon-like peptide-1 (GLP-1) pharmaceuticals, wearable consumer health devices and at-home diagnostics. While Resmed benefits from deep moats, sector-leading margins and a net cash balance sheet, we struggle to find meaningful upside to consensus estimates and see current valuation as full. We launch with a Neutral rating. It is estimated that up to 1 billion people aged 30-69 are affected by OSA globally (Fig 1).1 Labelled the ‘silent killer’ due to its strong links with cardiovascular (CV), metabolic and neurocognitive conditions, and ultimately increased risk of mortality, OSA presents a material health burden.

CPAP is not a cure for OSA, but it has long been the first-choice treatment, normalising the apnoea-hypopnea index (AHI) to <5 (normal sleep) in 90% of cases.2 A review of meta-analyses covering 230 randomised controlled trials (RCTs) published in The Lancet showed that CPAP was superior to GLP-1, mandibular advancement devices (MADs), hypoglossal nerve stimulation (HNS) and other therapies.”

For an analyst ratings summary and ratings history on ResMed click here. For more ratings news on ResMed click here.

Shares of ResMed closed at $219.98 yesterday.

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