Today in his article, Peter Switzer talks about ResMed. Here’s what Raymond Chan has to say about this Australian company.
“Third quarter results were above expectations, with double-digit bottom line gains on improving Gross profit margin (GPM), operating leverage, and strong cash flow,” Raymond said.
“Masks grew above market (+10%) on new patient set-ups and resupply, while devices (+5%) tracked to expectations, despite softer ex-US sales (+1% cc; but +8% ex-China-related covid-19 ventilator sales comp).
“While GPM and operating profit margin (OPM) jumped (150 basis points quarter-on-quarter) on improving cost of goods sold (COGS)/manufacturing efficiencies and lower selling, general, and administrative expenses (SG&A), respectively, management flagged Red Sea headwinds and investments needed in marketing and demand generation.
“Updated real-world data on obstructive sleep apnea (OSA) patients prescribed glucagon-like peptide-1 (GLP1) continues to show an increased likelihood of not only starting positive airway pressure (PAP) therapy, but also improving re-supply rates over time vs OSA patients not prescribed GLP-1s.
“We increase financial year 2024-2026 earnings up to c3%, with our target price rising to $34.11.
“We view Resmed (RMD) as an ADD,” Raymond said.
GRAPH FOR Resmed (RMD)
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