Citi lifts ResMed's ASX-listed stock target price after FX and valuation updates
RMD•Citi raised its target for ResMed's Australian-listed shares to A$34, while keeping its U.S.-listed share target at $240. It expects Q1 sales growth of 3.3%, including a 3% headwind from the absence of Astral ventilator sales and the MatrixCare divestment.
1. Targets and estimates
Citi raised its target for ResMed's Australian-listed shares to A$34 after updating foreign-exchange assumptions, its valuation date and peer multiples. Its target for the U.S.-listed shares remains $240.
2. Quarterly outlook
Citi expects Q1 sales growth of 3.3%, including a 3% headwind from the absence of Astral ventilator sales and the MatrixCare divestment. The brokerage said its revenue estimate is broadly in line with consensus, while its EPS estimate is about 2% below consensus due to a slightly lower gross margin forecast and a higher tax rate.
3. Investor concerns
Citi said investor caution continues to reflect uncertainty around competitor Philips' return to the U.S. market, though it said it has no evidence that a return is imminent. The brokerage said it continues to see weight loss drugs as a difficult-to-quantify tailwind.
