UPDATE: Deutsche Bank Upgrades ResMed Following Solid 4Q13 Results

In a report published Friday, Deutsche Bank analyst David Low upgraded ResMed RMD from Hold to Buy, and raised the price target from $46.00 to $54.00.

In the report, Deutsche Bank noted, “While the impact of competitive bidding won't be clear for some time, the solid Q4 result was encouraging. More importantly the result boosted our confidence in a number of supportive developments – the accelerating trend to HST (boosting market growth and mix), the impending benefits from new mask launches (with other new product likely in the wings), the growing importance of the ventilation range and the FX tailwind from the falling A$. Given the growing upside risk to earnings we have moved to a Buy rating given the upside to our revised PT of $54. Revenues of $415m (+11%) was just ahead (DB $412m) underpinned by strong device sales growth. Gross margin of 62.7% improved more than forecast (62.5%) due to mix and other efficiency gains. Adjusted EPS of 62.1¢ 5% ahead (DB 59.1¢) due to a smaller loss on FX contracts and lower tax. A 25¢ dividend was declared well ahead of our forecast of 17¢.”

ResMed closed on Thursday at $48.38.