ResMed: Inc 1Q in line - cost base reset; mkt dynamics unchanged
About the author:
- Author name:
- By Dr Derek Jellinek
- Job title:
- Senior Analyst
- Date posted:
- 30 October 2023, 7:30 AM
- Sectors Covered:
- ResMed Inc's (ASX:RMD) 1Q was broadly in line, with double-digit top-line growth and sequential improvement in operating leverage.
- Mask growth was a standout, supported by resupply and new patient setups at all-time highs, while device growth was somewhat tempered on tough comps.
- Management presented an epidemiological model of global OSA prevalence through 2050, suggesting while weight-loss drugs could shave up to c15% off TAM (worst case) the market would remain large (1.2bn) and underpenetrated (<10%).
- Sequential GPM improvement is encouraging, with restructuring and unwinding the Primasun JV resetting the cost base and accelerating profitable growth.
- We adjust FY24-26 forecasts modestly, with our DCF/SOTP based target price decreasing to (login to view) mostly on DCF assumption changes. Add rating maintained.
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