ResMed Inc (ASX: RMD) shares have fallen by more than 25% over the past year, which begs the question: Is now the time to buy in?

ResMed shares looking cheap according to analysts

The analyst team at Morgans has run the ruler over the company, and has a buy recommendation on the stock and a bullish share price target, which we’ll get to shortly.

The reason the Morgans team had another look at ResMed was because of the company’s recent move to sell its MatrixCare division for US$490 million, with that sale expected to be completed in the first quarter of FY27.

ResMed said the sale would allow it to focus more strongly on its core business.

As it said:

This move reflects Resmed’s 2030 strategy by focusing on high-growth, scalable opportunities in sleep health, breathing health and connected home-based healthcare. The divestiture also strengthens Resmed’s ability to reallocate capital and resources toward innovation, operational scale and long-term value creation across its connected, home-based care ecosystem.

MatrixCare is a software business focused on “nursing, senior living and long-term care, life planning communities, and home health and hospice care”.

The Morgans team said they believed the transaction made sense as it would simplify the ResMed business.

They added:

Importantly, net proceeds will largely be returned to shareholders via an accelerated share repurchase (ASR), which should substantially offset earnings dilution from both the MatrixCare disposal and the recently completed Noctrix acquisition, while FY26 guidance has been reaffirmed.

Morgans said MatrixCare, which ResMed acquired for US$750 million in 2018, had been a disappointing acquisition for the company.

Morgans said:

During this time, earnings increased from ~US$30m to ~US$55m, implying modest long-term earnings growth. While this reflects poorly on the original acquisition, we believe exiting today is preferable to continuing to allocate capital toward a mature business with limited strategic alignment.

ResMed target price has been reduced

Overall, Morgans remains positive on ResMed’s outlook; however, they slightly reduced their price target to $41.72.

As they said:

We view RMD’s fundamentals as sound, with consistent execution, strong cash generation and structural growth tailwinds from expanding diagnosis and resupply. We have a BUY rating with a sum of the parts/discounted cash flow target price of $40.97.

ResMed shares were changing hands for $28.25 on Thursday.

The company is valued at $40.06 billion and pays an unfranked 1.23% dividend yield.

ResMed will report its fourth quarter earnings on 6 August.

The post How much could ResMed shares rise according to Morgans? appeared first on The Motley Fool Australia.

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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 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.

Dividend winners do not usually begin with a dividend cut.

But that is what makes Jumbo Interactive Ltd (ASX: JIN) an interesting ASX income share to watch.

The Jumbo Interactive share price remains down more than 25% over the past 12 months, despite recovering from its recent 52-week low of $5.85 to trade back above $7.

The worst of the sentiment followed a Morgan Stanley downgrade in June. The broker lowered its rating to hold and slashed its 12-month price target from $14.50 to $8.40. Jumbo shares were subsequently whacked by around 17% at one point.

Yet underneath the negative sentiment sits a profitable, growing business offering a dividend yield of approximately 6% at the time of writing.

That payout has recently been reduced. However, the decision may strengthen Jumbo’s capacity to deliver more sustainable income over the long term.

Why cut a healthy dividend?

Jumbo’s leadership has deliberately lowered the company’s dividend payout ratio following its acquisitions of Dream Car Giveaways in the United Kingdom and Dream Giveaway in the United States.

That means more cash can remain inside the business to reduce debt and strengthen the balance sheet.

Income investors may understandably prefer receiving that cash today. However, paying down acquisition debt can reduce financial risk and give Jumbo greater flexibility long term.

It could also create an interesting future catalyst.

Should debt fall, earnings continue growing, and the board eventually restore a higher payout ratio, shareholders could benefit from a larger dividend and a potential valuation re-rating.

There are no guarantees, of course. Yet the current yield of around 6%, before considering franking credits, already looks competitive beside cash investments – even after the temporary payout reduction.

The underlying business is still growing

The recent trading update suggests Jumbo’s fundamentals are stronger than its falling share price might imply.

Management expects FY26 underlying operating earnings (EBITDA) of between $82 million and $85 million. That would represent growth of between 20% and 24%.

Underlying profits (NPAT) are forecast to rise by between 13% and 18% to between $48 million and $50 million.

Dream Giveaway US is the standout performer. Jumbo almost doubled its underlying earnings guidance from US$2.7 million to US$3 million to US$5.2 million to US$5.5 million.

Canadian managed services growth was also upgraded from 20% to 25% to 35% to 45%, supported by new business wins, product investment, and favourable campaign timing.

The improving performance of these newer operations matters because Jumbo is gradually becoming less dependent on Australian lottery ticket sales.

Its growing international prize-draw, software platform, and managed services businesses could provide additional earnings streams across the United States, the United Kingdom, and Canada.

Why dividends may matter more

Jumbo’s income potential could also attract greater attention following Australia’s capital gains tax reforms.

From 1 July 2027, the existing 50% CGT discount will be replaced by cost-base indexation and a minimum 30% tax rate on real capital gains. The reforms apply to gains arising after that date.

Investors should never choose a company solely because of tax changes. Total shareholder returns still depend on the quality of the business, its earnings, valuation, and future prospects.

However, where capital gains receive less favourable treatment, dependable dividends may become a more valuable component of investor returns.

What could go wrong?

The concerns surrounding Jumbo are real.

Its reseller agreements with the Lottery Corporation Ltd (ASX: TLC) run until 2030, and investors remain uncertain about renewal terms and future margins. The Dream businesses carry integration risk, while regulatory changes could affect the UK prize-draw market.

Bell Potter has retained its hold rating and set a $7.20 price target, citing ongoing concerns about Australian market share.

Jumbo is not a smooth-sailing dividend investment. But with earnings growing, international diversification gaining momentum, debt reduction underway, and a yield of around 6%, this beaten-down ASX share could be a hidden dividend winner worth watching.

The post Is this beaten-down ASX software stock hiding a dividend winner? appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Jumbo Interactive and The Lottery Corporation. The Motley Fool Australia has recommended Jumbo Interactive and The Lottery Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The AMP Ltd (ASX: AMP) share price is in focus after the company flagged an expected underlying net profit after tax (NPAT) of $170–180 million for the first half of 2026, driven by stronger China partnerships and increased investment income.

What did AMP report?

• Expected NPAT (underlying) for 1H26: $170–180 million
• China partnerships contributed approximately $56 million, a 24% increase over 2H25
• Group investment income added roughly $5 million compared to 1H25, benefiting from higher interest rates
• Platforms saw a favourable $5 million impact from the North Guarantee
• Recognition of approximately $13 million in carried interest from asset sales
• Negative revaluation of about $12 million in ‘Other Partnerships’ sponsor investments

What else do investors need to know?

AMP has received a portion of its carried interest tied to the sale of a 51% stake in legacy fund assets previously held by AMP Capital’s International Infrastructure Equity business. The sale, managed by DigitalBridge, delivered $13 million in carried interest recognised in the half-year result.

There is still potential for further carried interest earnings if the remaining 49% interest is sold, but this remains subject to conditions and regulatory approvals, so nothing is guaranteed at this stage.

AMP’s full 1H26 results will be released on 6 August 2026, with the company planning to provide more detail on its FY26 outlook at that time.

What’s next for AMP?

Investors looking ahead will be waiting on the August results announcement for additional information about AMP’s earnings trajectory and future guidance for full-year 2026. The business will likely update shareholders on carried interest developments and its strategic direction in China and other partnerships.

With earnings up on stronger investment income and China activity, AMP appears positioned to keep building momentum as market conditions evolve.

AMP Limited share price snapshot

Over the past 12 months, AMP shares have risen 21%, outperforming the S&P/ASX 200 Index (ASX: XJO), which has risen 2% over the same period.

View Original Announcement

The post AMP expects higher 1H26 earnings on China growth appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.