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

About the author:

Dr Derek Jellinek
Author name:
By Dr Derek Jellinek
Job title:
Senior Analyst
Date posted:
01 May 2023, 8:00 AM
Sectors Covered:

  • 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.

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