ResMed (ASX:RMD) is navigating a complex landscape as analysts weigh the impact of competitor Philips’ anticipated market re-entry against the company’s strong financial performance. Recent ratings adjustments reflect this uncertainty, creating a mixed outlook for the sleep apnea device manufacturer.
Stifel analyst Jonathan Block lowered the firm’s price target on ResMed to $260 from $270, maintaining a Hold rating. This decision is primarily driven by the expected re-entry of Philips into the U.S. market in late 2026, which could erode ResMed’s market share. Block also noted that if ResMed’s fiscal year 2027 revenue growth decelerates to a mid-single-digit percentage, the current earnings multiple may be appropriate.
In contrast, Citi analysts upgraded ResMed shares to a Buy rating, increasing the price target to AUD 44.00 from AUD 41.00, citing strong EPS growth and free cash flow.
The market has reacted with caution to the shifting analyst sentiment. ResMed’s stock on the NYSE was trading at $245.94 at the time of the analyst note, indicating a perceived upside of 5.7% to the Stifel’s new PT.
Analyst ratings present a diverging view on ResMed’s prospects. For example, UBS Group upgraded the rating from Hold to Strong-Buy, while JPMorgan increased the price target from $270.00 to $286.00, maintaining an Overweight rating. These varied assessments reflect differing views on ResMed’s future performance and competitive positioning.
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Following ResMed’s strong second-quarter earnings, several analysts revised their forecasts upwards. Piper Sandler maintained a Neutral rating but raised the price target from $248 to $270, while KeyBanc maintained an Overweight rating, increasing the price target from $274 to $298.
Bull Case:
- Strong EPS growth and free cash flow generation projected.
- Citi analysts upgraded to Buy with increased price target.
- Positive revisions after strong Q2 earnings.
Bear Case:
- Stifel lowered price target due to Philips’ re-entry.
- Potential market share loss of approximately 10%.
- Possible deceleration of revenue growth in FY27.
The conflicting analyst opinions and the anticipation of increased competition mean there is a need for greater analysis when it comes to ResMed’s future. While the company has demonstrated strong financial performance, the market’s reaction will likely depend on its ability to maintain market share and sustain revenue growth in the face of Philips’ re-entry.
