Top broker says ResMed (ASX:RMD) share price is a buy

This sleep treatment company’s shares could be in the buy zone…

| More on:
rising medical asx share price represented by woman stretching happily in bed

Image source: Getty Images

The ResMed Inc. (ASX: RMD) share price has been a very strong performer in 2021.

Since the start of the year, the sleep treatment focused medical device company’s shares have gained 35% to $37.12.

This leaves the ResMed share price trading within sight of its record high of $40.79.

Can the ResMed share price keep rising?

The good news is that it may not be too late to buy ResMed shares.

According to a recent note out of Credit Suisse, its analysts have retained their outperform rating and lifted their price target on the company’s shares to $44.00.

Based on the current ResMed share price, this implies potential upside of 18.5% over the next 12 months.

What did the broker say?

Credit Suisse was pleased with the company’s investor day event this month.

It notes that ResMed is expecting to benefit from upwards of US$350 million in incremental sales in FY 2022 from the Philips product recall. The broker also suspects that sustained market share gains will be achieved because of the recall and feels the market is underestimating this.

Particularly given how management advised that it has seen a measurable elevation in mask sales arising from this issue.

In addition, ResMed has revealed plans to expand its patient reach with a new partnership with US pharmacy giant CVS Health. Credit Suisse suspects that these new channels will help sustain device growth rates above the industry average over the long term. This is because the CVS pharmacy network provides broad penetration across the community channel. Approximately 75% of the US population live within 5 miles of a CVS store.

All in all, it feels this makes the ResMed share price good value at the current level.

Should you invest $1,000 in ResMed right now?

Before you consider ResMed, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and ResMed wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

Female miner smiling while inspecting a mine site with another miner.
Resources Shares

Brokers name 2 ASX 200 mining shares to buy

Here are two mining shares rated as buys...

Read more »

a chalk drawing of a car is connected to a real green battery, signifying clean energy
Materials Shares

2 sold-off ASX shares essential for electric cars

There are some stocks going for cheap now that represent producers of commodities that are essential for a zero-carbon future.

Read more »

a businessman in a suit tries to forge ahead but is carrying a rope attached to a large anchor that is stuck in the ground against a background of muted sky and barren earth.
Broker Notes

What’s dragging on the Wesfarmers share price on Monday?

We check what one leading broker has to say about the retail giant's prospects.

Read more »

Two medical researchers in white coats collaborate over a computer screen of data in a medical research laboratory
Broker Notes

Where next for the CSL share price?

CSL shares could be heading higher according to one leading broker...

Read more »

Woman on her laptop thinking to herself.
Broker Notes

2 ASX All Ordinaries shares top brokers rate as buys

Here are the latest buy-rated shares from two leading brokers.

Read more »

A woman sits at her computer with hand to mouth and a contemplative smile on her face although she is considering or thinking about information she is seeing on the screen.
Broker Notes

Brokers: 2 ASX 200 shares that could be top buys for growth

Brokers think these ASX 200 shares with growth potential could be leading opportunities.

Read more »

ASX shares Business man marking buy on board and underlining it
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers rate these ASX shares as buys...

Read more »

outperforming asx share price represented by row of white eggs with cartoon sad faces with one gold egg with happy face and crown
Broker Notes

This is the best ASX bank share to buy in a rising rate environment: Citi

Only one major bank is sticking to its cost-savings goals, according to the broker.

Read more »