Piper Sandler cuts ResMed stock price target to $248

On Thursday, Piper Sandler adjusted its price target for ResMed shares (NYSE:RMD), moving it down to $248 from the previous $260, while maintaining a Neutral rating on the stock. According to InvestingPro data, ResMed maintains a "GREAT" financial health score and boasts a perfect Piotroski Score of 9, indicating strong operational efficiency. ResMed recently disclosed its financial results for the third fiscal quarter, which showed revenues aligning with analysts’ projections but a slight miss on earnings per share.

ResMed reported a revenue of $1.29 billion for the quarter, marking a 9% year-over-year increase excluding foreign exchange impacts, matching Wall Street’s expectations. This performance was bolstered by a robust showing in the Masks & Other segment, which brought in $454 million, surpassing the predicted $449 million. However, the Devices segment underperformed slightly, with revenues of $676 million against the anticipated $682 million.

The company’s adjusted earnings per share (EPS) for the quarter was $2.37, which was one cent below the consensus estimate. Despite this slight earnings miss, ResMed showcased impressive gross margin improvements, attributed to successful efficiency initiatives. The company maintains a healthy gross profit margin of 59% and trades at an attractive PEG ratio of 0.63, suggesting potential undervaluation relative to its growth prospects. Additionally, the company provided positive updates regarding tariffs, indicating minimal expected impacts and reaffirming that its products are exempt.

The analyst from Piper Sandler remarked on the mixed quarter, acknowledging the good progress in margins and the tariff situation. The commentary highlighted that while the quarterly update from ResMed was solid, uncertainties remain about the underlying business, prompting the decision to maintain a neutral stance and adjust the price target. InvestingPro analysis reveals additional insights, with 10+ exclusive ProTips available for subscribers, covering crucial aspects like dividend consistency and debt management.

In other recent news, ResMed reported its third-quarter fiscal year 2025 earnings, showcasing an 8% increase in revenue, reaching $1.3 billion, which exceeded expectations. The company’s earnings per share (EPS) came in at $2.37, slightly below the forecast of $2.39. The revenue growth was bolstered by strong performance in the Masks & Accessories segment and a sequential improvement in gross margins. KeyBanc raised its price target for ResMed to $274, highlighting the company’s strategic positioning to mitigate tariff-related concerns. Meanwhile, Mizuho (NYSE:MFG) adjusted its price target for ResMed to $250, noting a decrease in Global Devices revenue but affirming a positive outlook due to strong CPAP re-supply revenue. Oppenheimer maintained its Perform rating, acknowledging ResMed’s 8% year-over-year revenue increase and the company’s strategic expansions in the U.S. ResMed’s management emphasized minimal financial impact from tariffs, supported by exemptions under the Nairobi Protocol, which continues to reassure investors.

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