The ResMed Inc. (ASX: RMD) share price has been a very strong performer over the last 12 months.
Since this time last year the sleep treatment focused medical device company’s shares have stormed 43% higher.
Is it too late to buy ResMed shares?
I don’t believe it is too late to buy ResMed’s shares. In fact, I continue to believe it is one of the best buy and hold options on the local share market.
This is due to its industry-leading masks and software in an obstructive sleep apnoea (OSA) tipped to grow materially over the next decade and beyond.
One leading broker that is also a fan of the company is Goldman Sachs. This morning the broker has reaffirmed its buy rating and $27.00 price target on the company’s shares.
Why is Goldman Sachs positive on ResMed?
According to the note, Goldman hosted a call with ResMed’s management yesterday and notes that demand for OSA products has remained robust during the pandemic.
Goldman commented: “… we came away from the discussion comforted that the demand profile for OSA masks appears robust (indeed, elevated in many markets due to a heightened appreciation of respiratory care, and facilitated by effective access/distribution through Brightree/resupply).”
While it acknowledges that OSA diagnoses are down year on year, volumes are recovering quickly and are currently at approximately 85% to 90% of last year’s levels.
And the broker suspects that things could get better from here due to an unexpected consequence of the pandemic.
It explained: “In our view, an interesting development through this period is the potential for accelerated adoption of home diagnoses. Prior to Covid-19, this pathway constituted c.40% of new patient volumes in the US and, though greater reliance was initially borne out of necessity, the company is now seeing significantly more clinical/payor support than previously, potentially improving the overall penetration story through the mid-term.”
So, with research estimating that there could be almost 1 billion people globally with OSA, I feel this development bodes well for its future growth and leaves ResMed well-positioned to be a market beater again over the next decade.
As well as ResMed, I think these quality shares could provide strong returns for investors…
3 “Double Down” Stocks To Ride The Bull Market
Motley Fool resident tech stock expert Dr. Anirban Mahanti has stumbled upon three under-the-radar stock picks he believes could be some of the greatest discoveries of his investing career.
He’s so confident in their future prospects that he has issued “double down” buy alerts on each of these three stocks to members of his Motley Fool Extreme Opportunities stock picking service.
*Extreme Opportunities returns as of June 5th 2020
More reading
- 5 things to watch on the ASX 200 on Friday
- Diversify your portfolio with 3 top ASX 200 shares from 3 sectors
- 2 ASX healthcare shares to buy for long-term growth
- You could beat the market in the 2020s with these ASX healthcare shares
- 3 companies with great intangible asset moats
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Why the ResMed share price could still go higher from here appeared first on Motley Fool Australia.
from Motley Fool Australia https://ift.tt/2UYvmKO
Leave a Reply