The ResMed Inc. (ASX: RMD) share price is trading around $31.62 on Tuesday.

At that price, I think the sleep treatment company is starting to look cheap given the earnings growth expected over the next few years.

Here is why.

The earnings growth catches my attention

I think ResMed has a bright outlook that makes it worth considering today.

The company generated earnings per share (EPS) of $1.54 in FY26.

Consensus forecasts point to EPS increasing to $1.69 in FY27, $1.85 in FY28, and $2.02 in FY29.

That works out to annual earnings growth of roughly 9% to 10% across each of the next three years.

I think that is a very healthy pace for a business of ResMed’s size.

It means that at $31.62, the ResMed share price is trading on a PE ratio of roughly 18.7 times forecast FY27 earnings. That falls to around 17 times FY28 earnings and less than 16 times the FY29 estimate.

For a global healthcare company expected to compound earnings at close to double-digit rates, those numbers look quite reasonable to me.

Plenty of room to keep growing

The valuation is only attractive if the business has somewhere to go from here. I think ResMed does.

Sleep apnoea is a major global health problem with an estimated 1 billion+ sufferers, and a significant number of them remain undiagnosed or untreated.

That gives ResMed a substantial market opportunity as awareness improves and more patients enter the healthcare system.

The company is already one of the global leaders in sleep and respiratory care, with its devices helping patients manage obstructive sleep apnoea and other conditions.

That position means ResMed does not need to create an entirely new market. It can continue growing as diagnosis rates increase and treatment reaches a larger proportion of the people who could benefit from it.

I also think broader health trends support the long-term opportunity. Ageing populations and rising obesity rates can contribute to the prevalence of sleep apnoea, potentially increasing the number of people who require treatment over time.

So, is the ResMed share price cheap?

I think it is a cheap buy. A forward PE ratio below 19 times does not strike me as demanding when analysts expect earnings to grow at roughly 9% to 10% a year.

If ResMed reaches the FY29 EPS forecast of $2.02, today’s price would represent less than 16 times those earnings.

Of course, forecasts can change, and healthcare companies still need to execute well to turn market opportunity into earnings.

But at the current price, I think investors are getting a compelling risk/reward ratio.

Foolish takeaway

At $31.62, I think the ResMed share price looks cheap for the growth on offer.

With earnings expected to keep rising and the company still facing a large global market opportunity, I would be happy buying at current levels and holding for the long term.

The post Is the ResMed share price a cheap buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is little changed on Tuesday.

After climbing as high as 8,697 points shortly after the open, the benchmark has since slipped back.

The ASX 200 is currently up just 0.04% at around 8,682 points, leaving it pretty much where it started the day.

It’s also a mixed session across the market, with 87 shares higher, 101 lower and 12 unchanged.

There are some big moves among individual shares, but investors also have one eye on this afternoon’s interest rate decision.

That could make things a lot more interesting later today.

So, let’s take a look at what’s happening.

Tech shares steal the show

The S&P/ASX 200 Information Technology Index (ASX: XIJ) is one of the strongest areas of the market today, up 2.41%.

Megaport Ltd (ASX: MP1) shares are 12% higher after announcing three new AI infrastructure contracts worth a combined $978.6 million.

The company also upgraded its FY27 revenue guidance to between $720 million and $810 million.

Codan Ltd (ASX: CDA) shares have also jumped around 18% to $60.84 after upgrading its earnings guidance.

Elsewhere, South32 Ltd (ASX: S32) shares are up 3.18% to $5.04, while QBE Insurance Group Ltd (ASX: QBE) has climbed 1.43% to $23.44.

However, those gains are being offset by weakness elsewhere in the market.

Banks weigh on the market

The major banks aren’t offering much support today, with all four trading lower.

Commonwealth Bank of Australia (ASX: CBA) shares are down 0.67% to $151.45, and National Australia Bank Ltd (ASX: NAB) has slipped 0.61% to $41.70.

Westpac Banking Corp (ASX: WBC) shares are down 0.50% to $38.15, with ANZ Group Holdings Ltd (ASX: ANZ) having fallen 0.62% to $37.04.

Wall Street falls overnight

Our share market also received a weak lead from Wall Street overnight.

The Dow Jones Industrial Average (DJX: .DJI) fell 0.67%, while the S&P 500 (SP: .INX) dropped 0.77%.

The Nasdaq Composite (NASDAQ: .IXIC) fell the most, down 0.92%.

US Treasury yields also moved higher, with the 10-year yield climbing above 5.2%.

All eyes on the RBA

The big event is still to come, with the RBA set to announce its latest interest rate decision at 2:30pm AEST.

The cash rate currently stands at 4.35% after three increases in 2026, with another rise widely expected today.

Investors also received new household spending figures this morning.

Spending was flat in August after climbing 1.1% in July, while annual growth remained at 6.8%.

The RBA decision, and what Governor Michele Bullock says afterwards, could have a much bigger say in where the market finishes today.

The post ASX 200 holds steady as investors brace for a big afternoon appeared first on The Motley Fool Australia.

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• Why I’d buy NAB shares in October
• This ASX tech company just surged past the $10 billion valuation mark after a major profit upgrade
• Megaport shares on watch after locking in almost $1 billion of new AI deals
• Megaport lifts FY27 outlook after landing $1B in new AI infrastructure deals
• Codan trading update: Record H1 FY27 profit and revenue

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When it comes to iron ore, BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) are the obvious names. However, if you’re looking for serious share price upside, junior companies can be worth a look.

ASX iron ore junior with potential

UBS has just initiated coverage of Champion Iron Ltd (ASX: CIA), and believes there is significant share price appreciation to be had over the next 12 months.

I’ll get to their specific share price target shortly. Firstly let’s have a look at why UBS likes the company.

The broker said broadly, they expect iron ore markets to remain balanced over the medium term, “with benchmark prices supported by cost inflation and resilient, albeit moderating, steel demand”.

With regards to Champion in particular, UBS said the company’s iron ore grades were the key differentiator.

The broker added:

Growing demand for premium steelmaking inputs, declining seaborne ore quality, and increasing blending requirements support structurally attractive economics for ultra high-grade iron ore producers. In our view, the market underappreciates CIA’s premium-grade product suite and the potential for improved premium capture as the Direct Reduction Pellet Feed (DRPF) facility ramps up.

UBS said the company’s pellet feed facility lifts the grade of its products from 66.2% to 69%, increasing the company’s exposure to premium markets.

The broker added:

Our CIA investment case rests on the market underestimating the scarcity value of CIA’s ultra-high-grade product suite, and the price realisation/earnings leverage from DRPF. As a result, we expect earnings to move above consensus from FY30.

UBS said Champion’s Bloom Lake mining operation, “benefits from a large, consistent orebody and established rail and port infrastructure, supporting reliable production and cost visibility”.

And they said the company was less vulnerable to price volatility due to the premium product being produced.

As they said:

Product quality and integrated logistics should underpin cash generation through the cycle, though fixed logistics costs reduce flexibility in weaker markets. Margin durability therefore remains tied to supportive high-grade premiums.

ASX iron ore shares looking cheap

UBS has a price target of $4.15 on Champion shares compared to $3.06 currently, and is also forecasting a 4% dividend yield.

Champion Iron is valued at $1.71 billion.

UBS recently raised its long-term iron ore forecast to US$93 per tonne from US$85 per tonne.

The broker said:

While consensus remains focused on Simandou’s supply addition and weaker Chinese construction activity, we believe the market is underestimating three structural supports to iron ore prices: resilient steel demand led by China’s manufacturing and export complex and the emergence of the Global South, a tighter iron-unit market balance once depletion and Fe grade decline are incorporated, and cost curve support that remains materially higher than in prior cycles.

The post This ASX iron ore junior could rise more than 33% UBS says appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Corporate Travel Management, JB Hi-Fi, BHP shares
• Is the ResMed share price a cheap buy?
• ASX 200 holds steady as investors brace for a big afternoon
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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.