Is Now the Right Moment to Snag ResMed Shares?
Investors have turned their attention to ResMed Inc (ASX: RMD) as its shares saw a current 2.13% rise to $28.24. This shift particularly stands out as it sharply contrasts the broader market’s downturn, with the S&P/ASX 200 Index (ASX: XJO) down by 1.15% amidst recent inflation data.
Last week’s trading session had ResMed shares at a notably higher $31.75, but their value dipped following disclosures from a U.S. medical study regarding obesity treatments’ impact on obstructive sleep apnoea (OSA), a condition that ResMed’s products address.
Despite Monday’s drop to $27.74, investors seem to be eyeing a rebound, tentatively buying the dip. But is this strategy advantageous?
Understanding ResMed’s Market Position and Analyst Perspectives
- ResMed’s Market Response: With a recent plunge due to new OSA treatment studies, ResMed’s shares tilt towards recovery. The critical question for investors: does the low price offer a viable entry point?
- Citi’s Assessment: Top brokerage firm Citi has downgraded ResMed to neutral and reduced the price target from $36 to $30. This suggests a modest 6% potential increase within the next year, a reflection upon the study’s repercussions.
- Long-term Market Impact: Eli Lilly’s successful study could potentially shrink ResMed’s total addressable market for CPAP devices by up to 35%. Consequently, this has prompted revisions to revenue growth forecasts and outlooks for ResMed.
ResMed’s CEO remains confident in the market’s vastness and ResMed’s ability to sustain itself, even considering the proliferation of GLP-1 medications.
Should You Invest in ResMed Shares?
The central debate for investors is the decision to either take advantage of ResMed’s current price point or to heed brokerage forecasts suggesting only a slight growth horizon. ResMed, with its 22.5 million customer base for OSA products, still holds a significant market presence despite the emerging competition from GLP-1 treatments.
Although experts project a scaled-down forecast for ResMed’s growth, the company’s resilience and existing market traction cannot be overlooked. Investors must balance the looming threat of a shifting healthcare landscape with the stability and past performance of ResMed.
Concluding Insights
Ultimately, ResMed’s shares present a nuanced opportunity: there’s potential for gain, but also a need for caution. As the medical industry evolves and new treatments emerge, the market dynamics may change. Investors should consider their risk appetite and long-term plans when deciding whether now is the time to capitalize on ResMed’s share price.