Concerns over ResMed competition 'overblown': Morningstar
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The news: Morningstar analysts have shrugged off concerns of competition to respiratory health company ResMed’s sleep apnea devices.
The numbers: Morningstar has retained its USD264 ($397) fair value estimate, which translates to a $40 a share value for the ASX listed scrip.
ResMed shares were nearly 2% lower at $28.10 in early trading on the ASX.
The context: Shares in ResMed, which provides medical devices for the treatment of sleep apnea, have been under a cloud since US rival Eli Lilly last week announced its GLP-1 weight-loss drug Zepbound helped resolve sleep apnea in up to 52% of patients in two late-stage trials.
However, Morningstar analyst Shane Ponraj said concerns that Eli Lilly's drug might disrupt the sleep apnea industry were "overblown".
What they said: "A combination of the GLP-1 drugs and positive airway pressure (PAP) therapy would likely be the most appropriate care for patients with both obesity and sleep apnea," Ponraj said.
He added that shares in narrow-moat ResMed remain undervalued.
The source: Morningstar research
