Stifel maintains ResMed stock hold rating and $240 target

On Thursday, Stifel analysts maintained their Hold rating on ResMed stock (NYSE:RMD) with a steady price target of $240.00. The analysts’ evaluation followed the release of the company’s fiscal third-quarter 2025 results, which showed that while device sales did not meet their projections, mask sales exceeded expectations. This led to a worldwide constant currency growth of 9%, aligning with their estimates. The company, which boasts a perfect Piotroski Score of 9 according to InvestingPro data, reported quarterly EPS of $2.37, closely matching Stifel’s prediction of $2.36 and just below the consensus estimate of $2.39. With a market capitalization of $34.6 billion and strong financial health metrics, including a current ratio of 3.33, ResMed demonstrates solid operational efficiency.

The analysts noted that the overall results might not be sufficient to change the current cautious sentiment among investors, particularly due to ongoing concerns about GLP-1 (glucagon-like peptide-1) ahead of expected reimbursement changes for Zepbound in the second half of 2025. InvestingPro analysis suggests the stock is slightly undervalued at current levels, trading at an attractive PEG ratio of 0.63. Despite these concerns, ResMed’s management provided a positive update during the earnings call regarding tariffs. They announced a nearly complete exemption under the Nairobi protocol, which was described as a short-term relief for some investors.

However, Stifel’s analysts expressed medium-term concerns, citing recent due diligence that suggests potential challenges associated with GLP-1. They indicated that the positive momentum in revenue and EPS estimates for fiscal year 2026 has stalled recently. The company maintains steady growth with revenue increasing 9.38% over the last twelve months, and InvestingPro data shows analysts expect EPS to reach $9.53 in FY2025. The analysts concluded that without an increase in these numbers, significant stock price appreciation might be challenging, especially considering that multiple expansion seems unlikely in the face of GLP-1 uncertainties.

In other recent news, ResMed reported its third-quarter fiscal year 2025 earnings, showcasing an 8% year-over-year revenue increase to $1.292 billion, exceeding both Oppenheimer’s and consensus estimates. The company’s earnings per share also surpassed expectations, coming in at $2.48. RBC Capital Markets, KeyBanc Capital Markets, and Mizuho (NYSE:MFG) Securities have all made adjustments to their price targets for ResMed following these results, with RBC raising its target to $255, KeyBanc to $274, and Mizuho reducing it to $250. Piper Sandler also adjusted its price target downward to $248, maintaining a Neutral rating, citing a slight miss on earnings per share despite solid revenue figures.

ResMed’s gross margin improvements were noted by several analysts, attributed to successful efficiency initiatives and tariff exemptions under the Nairobi Protocol. The company’s products are largely exempt from U.S. import tariffs, which analysts from KeyBanc and Mizuho view as a positive factor for ResMed’s financial health. Furthermore, ResMed plans to expand its U.S. presence with a new plant in Calabasas, anticipated to open in June 2025. Oppenheimer analysts mentioned potential challenges from GLP-1 medications, which could impact ResMed’s CPAP device business in the long term. However, current exemptions and strategic positioning are expected to support ResMed’s continued growth and stability.

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