Thoughts on ResMed (RMD) please

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Question asked 01/03/2024

Thoughts on ResMed (RMD) please

Hi Market Matters Can I have your current view on Resmed. It has fallen over 4% so far today (29/2) to around $26.74. What news has caused this fall? I have read recently- "March 2024 presents a significant risk to RMD, due to the pending release of Eli Lilly’s (NYS: LLY) SURMOUNT study into the effect of its GLP-1 drug - tirzepatide on patients suffering from OSA (Obstructive Sleep Apnoea) and or Obesity. " "Likewise, there is also the potential that the SURMOUNT study acts as a tailwind to RMD’s share price. If the study determines that GLP-1s have little or incremental effects towards reducing the symptoms of sleep apnoea or that GLP-1s can be used as an effective treatment alongside PAP therapy, then the release of the study may act as a catalyst for RMD" Do you have the same concern that this pending SURMONT study will again cause downward pressure on RMD's price. regards Debbie

Answer

Hi There,

We must not get too close to intra-day/week stock swings, they’re often no more than order flow &/or news driven flow. RMD has bounced +40% from its panic sell-off in late 2023 hence a pullback, period of consolidation is to be expected. The simple reason for its fall on the ASX today is its ~4% fall in the US overnight not helped by the recent move by Director Peter Farrell selling ~$5mn worth of stock.

We remain long and bullish RMD in our Active Growth Portfolio but we do expect elevated volatility over the coming weeks/months as news flow around GLP-1 drugs picks up – we will continually evaluate our exposure as news flows through.

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