UPDATE: Bank of America Upgrades ResMed to Buy, Raises PT on Multiple Positive Factors

In a report published Monday, Bank of America analyst Matthew Prior upgraded the rating on

from Neutral to Buy, and raised the price target from $51.85 to $56.60. In the report, Bank of America noted, “We upgrade RMD to Buy with expectation of a near term new Flow Generator (FG) release and greater confidence on Gross Margin expansion from FG mix. Whilst we expect 1Q14 will reveal weaker US FG growth (MLe +6%), a key metric for the high levels of short interest, we predict: 1) a new FG product launch, 2) strong ROW FG growth (from SG&A reallocation), and 3) a higher Gross Margin (VPAP/ Bi-Level now >25% of sales) will be enough to get the stock through this key 1Q juncture.” ResMed closed on Friday at $49.18.