If you've been paying attention to ResMed Inc (ASX: RMD) shares lately, you would know they've been on a very strong roll.
The ASX healthcare giant has enjoyed strong momentum throughout 2024, with its share price up 45% year to date.
But what does 2025 have in store for ResMed shares? Let's dive into what the experts think.
What's driving growth in ResMed shares
ResMed's business success in 2024 is underpinned by its growing demand for obstructive sleep apnoea (OSA) products.
The company reported a 12% lift in revenue, reaching $4.7 billion for FY24, and produced $1.3 billion in free cash flow. As I've mentioned previously, that means for every dollar of revenue, 27.7 cents went straight to free cash flow.
One talking point was ResMed's myAir app, which saw patient enrolment rise by 28% year over year.
But it's not just the numbers that have investors piling into ResMed shares.
ResMed operates in a significantly underpenetrated market for OSA, of which there are an estimated 1 billion sufferers globally.
It has a dominant position in this market following the recall of Philips' competing line of continuous positive airway pressure (CPAP) machines, which are used to manage OSA.
What are analysts projecting for 2025?
Looking forward, analysts have high hopes for ResMed. According to CommSec, the consensus of analyst estimates rates it a buy.
Consensus estimates also forecast the company's earnings to grow 20% between FY25 and FY27, with a potential earnings per share (EPS) of $1.54 by the latter year.
Ord Minnett is also bullish, rating ResMed as a buy with a price target of $40.05.
The broker highlighted ResMed's strong September quarter, where revenue grew 11%, and EPS surged by 35%.
It forecasts the company to grow EPS by 13% in 2025, "which justifies its current trading multiples". ResMed trades on a price-to-earnings (P/E) ratio of 32x at the time of writing.
Meanwhile, US-based investment firm Baird also rates ResMed as a buy, citing the increasing prevalence of obstructive sleep apnoea (OSA) as a key driver.
However, it flagged concerns about potential competition from GLP-1 weight-loss drugs, which could reduce the prevalence of OSA.
Baird set a price target of US$280 for ResMed's US-listed shares, which currently sit at US$239 apiece, more than 17% upside potential.
Foolish takeout
ResMed shares are rated favourably heading into 2025. Brokers on aggregate say its a buy, and the general consensus is for reasonably strong growth next year.
In the last 12 months, Resmed is up 49%.
