ResMed (RMD) is projected to attain high-single-digit EPS growth over the next three years, despite the possibility of competitor Philips Respironics returning to the US market in fiscal 2028, RBC Capital Markets said in a Tuesday note.
The company demonstrated an increased focus on capital management in its fiscal Q4 results, with an announced large share repurchase program for fiscal 2027, RBC analysts noted. They estimated that ResMed can execute a $1.5 billion share repurchase program each year until fiscal 2031 and still remain in a net cash position, given its strong free cash flow generation.
Assuming competitor Philips Respironics returns to the US market in fiscal 2028, the analysts forecast ResMed's Americas sleep device sales to decline by 2% in fiscal 2028 and grow 2% in fiscal 2029. However, the analysts believe that the company can still deliver mid-single-digit to high-single-digit EPS growth in those two years in such a scenario.
ResMed continues to be the market leader in obstructive sleep apnea devices and accessories, and it will continue benefiting from increased awareness and penetration of the global market, RBC said.
RBC upgraded the company's stock rating to outperform from sector-perform and raised the price target to $262 from $244.
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