Goldman Sachs Rates ResMed as a Top Buy for Future Growth
Goldman Sachs Initiates 'Buy' Rating on ResMed
Goldman Sachs has recently taken a positive stance on ResMed Inc (NYSE: RMD) by starting coverage with a 'Buy' rating. The firm has established a price target of A$48.9 for the company, which is significantly influenced by promising growth prospects in its continuous airway pressure (CPAP) therapy segment.
Factors Driving Growth for ResMed
Several key factors contribute to the optimistic outlook for ResMed. A primary driver is the increasing awareness surrounding obstructive sleep apnea (OSA), which has led to a higher demand for CPAP devices. Additionally, ResMed has been gaining market share in the OSA mask segment, further enhancing its growth potential. The company's efforts in cost management and optimizing its product mix have also resulted in improved operating margins.
Forecasts and Revenue Growth Potential
Goldman Sachs anticipates a robust growth trajectory for ResMed, projecting mask revenue increases that surpass consensus estimates by 2.4% to 10.7% for the upcoming fiscal years 2025 to 2027. This growth forecast underscores the expanding demand for ResMed's products as the healthcare landscape evolves.
Innovations in Product Development
The firm highlights ResMed’s commitment to innovation, noting that the company is set to launch new masks and accessories by late 2024. With these innovations on the horizon, ResMed may very well achieve the higher end of its fiscal revenue growth targets set for 2030.
Coexistence of CPAP Therapy and Emerging Treatments
An interesting observation made by Goldman is the potential coexistence of CPAP therapy and GLP-1 drugs, which are becoming increasingly popular in the treatment of OSA. The support from clinical data and favorable insurance policies further solidifies this trend, indicating that ResMed could maintain a strong position in the market.
Price Target Insights
The 12-month price target articulated by Goldman Sachs signifies a remarkable 30% upside potential for ResMed. This target is derived from a mix of discounted cash flow analysis and EV/EBIT multiples, showcasing a solid foundation for investor confidence in the company’s future performance.
Frequently Asked Questions
What is the current rating of ResMed by Goldman Sachs?
Goldman Sachs has initiated coverage of ResMed with a 'Buy' rating.
What price target has Goldman Sachs set for ResMed?
The price target is set at A$48.9.
Which segment of ResMed is expected to drive growth?
The continuous airway pressure (CPAP) therapy segment is anticipated to drive substantial growth.
What are the key innovations expected from ResMed?
ResMed plans to launch new masks and accessories in late 2024.
How much upside potential does Goldman Sachs predict for ResMed?
Goldman Sachs forecasts a 30% upside potential over the next 12 months.
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