On Friday, Piper Sandler began its coverage of ResMed Inc . (NYSE:NYSE:RMD) by assigning a Neutral rating to the company's stock, along with a price target of $252.
The research firm's analysts noted ResMed's strong execution and the positive rebound of its shares from the lows experienced in the summer of 2023. However, they expressed a cautious stance regarding the potential impact of GLP-1s on ResMed's device and mask businesses.
According to Piper Sandler, the company's initial analysis suggested that GLP-1 users might be more inclined to start Continuous Positive Airway Pressure (CPAP) therapy and exhibit higher resupply rates. While acknowledging this possibility, the analysts also recognized that the emergence of GLP-1s could raise awareness and diagnosis rates of Obstructive Sleep Apnea (OSA), which currently stand at around 20%. The analysts also pointed out that wearables could serve as a potential tailwind for the company.
Despite the potential for market expansion and the company's strong past performance, Piper Sandler has chosen a cautious "wait-and-see" approach. They are looking to observe whether ResMed can maintain high single-digit (HSD) and double-digit (DD) growth rates on the top and bottom lines, respectively, before adjusting their stance on the stock.
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