Analyst David Bailey of Morgan Stanley maintained a Buy rating on Resmed, boosting the price target to $305.00.
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David Bailey has given his Buy rating due to a combination of factors that highlight Resmed’s strong financial performance and growth potential. The company has demonstrated solid growth in its Americas devices segment, with an 8% year-over-year increase, and has achieved a higher-than-expected gross margin of 62%, driven by improvements in component costs and manufacturing efficiencies. Additionally, Resmed’s operating cash flow surged by 40% in the first quarter of 2026, with free cash flow up by 35%, indicating robust cash generation capabilities that provide opportunities for capital management and acquisitions.
Furthermore, Bailey notes the favorable growth outlook for Resmed, supported by increased market penetration and awareness of obstructive sleep apnea (OSA). The company’s strong balance sheet and attractive return on invested capital (ROIC) further enhance its valuation appeal. Despite some challenges in the SaaS/RCS segment, the potential for mid-to-high single-digit growth in the latter half of 2026 and high-single-digit growth in the first quarter of 2027 remains. These factors, combined with the potential for EPS accretion through share buybacks, underpin Bailey’s positive outlook and Buy rating for Resmed.
Bailey covers the Healthcare sector, focusing on stocks such as Cochlear , Telix Pharmaceuticals, and Ramsay Health Care. According to TipRanks, Bailey has an average return of 11.1% and a 43.66% success rate on recommended stocks.