Updated thoughts on ResMed (RMD) please

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Question asked 29/09/2023

Updated thoughts on ResMed (RMD) please

Enjoyed the webinar this week - great content & opinions as usual. Having bounced from around 20x earnings, RMD has bounced back this week. With some short covering perhaps partly helping, will you look to exit your RMD position at all? if so, at what sort of P/E level (noting it will likely trade at a lower multiple due to the uncertainty of the weight loss drugs impact)? Will you hold out for the next quarterly anticipating any positive forecast catalysts what with the negative sentiment recently priced in? If positive, would you expect the share price to back trend upwards? Thanks as ever

Answer

Hi,

Thanks for the feedback on the recent webinar and very topical and on point question, especially after the stocks ~14% bounce this week. There are a few moving parts at play with RMD but our best estimates today are as follows:

We can see RMD rotating in a $20-$26 trading range (~20%) over the coming months as investors/traders attempt to second guess the impact of Ozempic et al hence we will consider tweaking our position in the Flagship Growth Portfolio accordingly.
In terms of valuation the stock has been down to ~19x compared to its 34x historical average, on Friday afternoon it was close to 22x, again a few dollars higher and we may trim our position.
Markets hate uncertainty hence we believe it may be many quarters until the stock trends sustainably back on the upside.

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ResMed Inc (RMD)

LAST UPDATED 29/09/2023 12:38

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