ResMed Inc: 3Q beat - Improving supply and manufacturing output

About the author:

Author name:

By Dr Derek Jellinek

Job title:

Senior Analyst

Date posted:

01 May 2023, 8:00 AM

Sectors Covered:

Healthcare

• ResMed (ASX:RMD) 3Q was ahead of expectations on strong sales across all product lines, but with GM headwinds and higher opex limiting robust operating leverage.
• Improved supply and manufacturing scale-up saw unconstrained S10 devices access in North America, with some (albeit improving) constraints on S11 devices, while masks benefited from resupply programs and all time highs in new patient setups.
• While softer GPM disappointed, it appears due mainly to unanticipated unfavourable product mix and higher component costs, with management confident headwinds are abating and margins can expand going forward.
• We adjust FY23-25 forecasts modestly, with our DCF/SOTP based target price increasing to (login to view). Add rating maintained.

Find out more

If you would like more information, please contact your adviser or nearest Morgans office. 

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.