The ResMed Inc (ASX: RMD) share price has quietly staged a strong comeback over the past year.
After a sharp sell-off in 2023 sparked by concerns over weight-loss drugs impacting sleep apnoea treatment demand, sentiment has shifted.
The sleep disorder treatment company's shares are up 21% in the last 12 months. This leaves them trading a touch short of their 52-week high of $40.75.
So, with its share price edging closer to a new high, investors may be wondering: Is ResMed still cheap?
Let's look at what the numbers and the brokers say.
What is being said about the ResMed share price?
The good news is that the broker community agrees that it isn't too late to buy the company's shares.
In fact, despite charging higher over the past 12 months, Bell Potter highlights that its shares are still trading on lower than average multiples. It said:
The 12MF P/E has fallen from ~32x to its current ~23x, yet its earnings remain robust and continue to see upward revisions. RMD also maintains a strong balance sheet and an FY25 ROE of 25%. We think RMD is attractive as a defensive option (with growth) in portfolios.
It is for this reason that the ResMed share price features on the broker's Australian equities panel. These are the ASX shares that it believes offer "attractive risk-adjusted returns over the long term."
It is a similar story over at Ord Minnett. Its analysts highlight that ResMed's shares have an "appealing valuation" given its positive growth outlook. The broker said:
Ord Minnett expects that solid operating leverage to be maintained, or even slightly increased, driven by a further widening in gross margin, discipline on selling, general and administration expenses, and greater production efficiencies.
ResMed is in a strong position for continued growth in earnings, noting we forecast EPS growth of 14% in FY26, while the company's balance sheet can accommodate an increase in its share buyback program. Combined with an appealing valuation, Ord Minnett raises its recommendation on ResMed to Buy from Accumulate.
How much upside?
Ord Minnett currently has a buy rating and $46.50 target on its shares. Based on the current ResMed share price of $38.55, this implies potential upside of 21% for investors over the next 12 months.
Elsewhere, Macquarie has an outperform rating and $48.00 price target, implying upside of nearly 24% from current levels. Whereas Morgans rates the stock as an add with a $44.07 target.
All in all, it is fair to say that brokers believe the company's shares are still cheap at current levels.
