Here's why ResMed shares can jump a further 20%

Investors have done very well from this stock recently. The good news is that analysts expect the trend to continue.

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ResMed Inc (ASX: RMD) shares are pushing higher on Monday.

In afternoon trade, the sleep disorder treatment company's shares are up 1% to $28.28.

This means that its shares are now up 33% since hitting a 52-week low in September.

Can ResMed shares keep rising?

While it might look like you're too late to the party, a number of analysts and fund managers don't believe that is the case.

For example, the team at Blackwattle highlighted ResMed shares as a key reason for the recent outperformance of the investment company's mid cap fund. It said:

Resmed rose 15% in January and was a key positive contributor to performance during the month. The company reported strong Dec Q results during the month which reinforced the company's ability to grow earnings with reasonable consistency in the face of the broadening GLP-1 class of drugs.

The fund manager also notes that concerns over weight loss drugs (GLP-1s) are unwarranted. So, with its shares still down 10% on a 12-month basis, Blackwattle appears confident on its investment in the company. It adds:

RMD also showed data that demonstrates patients who use both GLP-1 and CPAP treatment tend to benefit from therapy in combination, not in competition as the market assumed initially. RMD key competitor in CPAP, Philips (PHG EU), also continues to struggle with the repercussions of its highly damaging US recall, supporting our view that RMD will maintain higher market share levels the US.

Who else likes ResMed?

Blackwattle isn't alone with its positive view on ResMed. A number of brokers still see plenty of upside ahead for its shares. This includes Citi and Macquarie, which have the equivalent of buy ratings and price targets of $34.00 and $33.45, respectively.

This implies potential upside of 20% and 18% for investors over the next 12 months.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in ResMed. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and ResMed. The Motley Fool Australia has positions in and has recommended Macquarie Group and ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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