ResMed shares rise as Q4 result impresses analysts
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The news: ResMed was comfortably the best performing stock across the ASX 200 in morning trade, as analysts remained bullish on the medical equipment maker after the release of its June quarter results on Friday.
The numbers: ResMed shares were up 4.8% to $33.32 by 11:30am AEST, extending Friday's gains after the healthcare group posted an increase to its Q4 revenue and margins.
Morgans kept its 'add' rating on the stock and hiked its 12-month target price from $34.11 to $35.93. Citi maintained its 'neutral' rating and lifted its target price from $30 to $34. Macquarie retained its 'outperform' rating, raising its target price from $35.40 to $36.25.
The context: ASX and NYSE-listed ResMed's June quarter result was roughly in line with analysts' forecasts. However, Morgans noted that ResMed's gross profit margin "surprised to the upside", as tailwinds — including cost optimisation, scale benefits and a favourable product mix — offset ongoing freight cost headwinds.
Likewise, Macquarie analysts said the company's Q4 gross margin and its FY25 outlook were both ahead of expectations, noting "solid operating leverage and strong free-cash flow".
They continue to see ResMed as "attractive at current levels", with favourable earnings per share, growth outlook, balance sheet position and valuation. Along with CSL, ResMed continues to be Macquarie's preferred sector exposure, they said.
The sources: Macquarie research, Citi research, Morgans research
