ResMed Remains Comfortable Pricing Products At A 5%-10% Premium To The Competition
Analysts at Piper Jaffray reiterate their "overweight" rating on ResMed (NYSE: RMD). The target price for RMD is set to $76.
According to Piper Jaffray, “Management reiterated the overall healthy OSA market growth trends remain intact, with the U.S. market continuing to increase 12%-14%, with favorable mix and volume growth partially offset by unfavorable pricing headwinds (3%-5%).”
"ResMed remains comfortable pricing products at a 5%-10% premium to the competition, which tends to soften the pricing headwinds. The S9 platform carries a greater premium and carries a lower than average cost of goods, contributing to gross margin expansion. Management described Philips PR System One launch as having a minimal impact on their overall business and is not aware of any material near-term competitive launches. We view ResMed's continued above market growth rates as supportive of this claim,” the analysts mention.
Piper Jaffray adds, “In the near-term, ResMed will launch the S9 Escape and S9 Escape Auto, rounding out their CPAP line-up, with additional S9 product extensions expected in the bi-level category in the intermediate-term. ResMed's Mask pipeline was described as ‘very strong,’ although launch time-lines and product details were scarce.”
