The ResMed CDI (ASX: RMD) share price has been caught up in today's market selloff.
In afternoon trade, the medical device company's shares are down 4% to $33.58.
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Is this a buying opportunity?
While today's weakness in the ResMed share price is disappointing for shareholders, it could be a buying opportunity for the rest of us.
According to a recent note out of Morgans, its analysts have put an add rating and $40.80 price target on its shares.
Based on the current ResMed share price, this implies potential upside of 21% over the next 12 months.
Why is the broker bullish on the ResMed share price?
Morgans was pleased with the company's performance during the first quarter and believes it will benefit in the short term from the recall of the rival Phillips device.
In respect to the recall, the broker previously commented: "We estimate the recall gain is c40% of Philips' sleep device revenue (cUS$780m), or c13% of its market share (assuming it holds 33% share of a US$2.3bn market)."
However, it is the medium to long term that makes Morgans most positive on the ResMed share price. Its analysts are particularly positive on its connected-care digital platform and see major growth opportunities.
The broker explained: "While we believe the next few quarters will likely be volatile, as COVID-related demand for ventilators continues to slow and core sleep apnoea volumes gradually lift, nothing changes our medium/longer term view that the company remains well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain."
All in all, the broker appears to believe this could make it worth considering the sleep treatment focused medical device company's shares as a buy and hold option.
