Rothschild Redburn initiates ResMed stock coverage with neutral rating

Investing.com reports that Rothschild Redburn has begun covering ResMed Inc. (NYSE:RMD) with a neutral rating and a price target of $230.00. The firm describes ResMed as the market-leading provider of a highly effective treatment for obstructive sleep apnoea in an underpenetrated market. While the analyst sees potential for continued growth in continuous positive airway pressure as a treatment option, they acknowledge structural barriers that could impact growth.

The firm identifies several key factors that could influence the company's performance, including the impact of new pharmaceuticals, wearable health devices, and at-home diagnostics. Rothschild Redburn finds it difficult to envision significant upside potential compared to current estimates and views the stock's current valuation as fully priced in.

The company's shares have fallen 22.5% over the past year. ResMed estimates that around 1 billion people aged 30-69 worldwide suffer from obstructive sleep apnoea, with CPAP being the primary treatment option, as it normalizes the apnoea-hypopnea index in 90% of cases. Despite this, CPAP is not a cure for the condition. ResMed recently reported its fourth-quarter results, surpassing earnings expectations with non-GAAP earnings per share of $2.95, while revenue came in slightly below forecasts at $1.46 billion.