ResMed Inc: 4Q mixed - sales solid but ‘altruism’ sees softer GPM
About the author:
- Author name:
- By Dr Derek Jellinek
- Job title:
- Senior Analyst
- Date posted:
- 07 August 2023, 7:00 AM
- Sectors Covered:
- ResMed Inc's (ASX:RMD) 4Q was mixed, as strong sales across all product lines failed to translate into operating leverage.
- Unconstrained supply and Philips continued market absence supported device growth, while masks benefited from resupply programs and new patient setups.
- While softer GPM disappointed, a bit of altruism appears to be at play, as demand fulfillment, despite unfavourable product mix and higher inventory component costs, trumped short-term profit growth. However, we believe an expanding installed base and franchised customers should not be frowned upon by the market, with margins likely to improve through FY24 on abating headwinds.
- We adjust FY23-25 forecasts modestly, with our DCF/SOTP based target price decreasing to (login to view). Add rating maintained.
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