UPDATE: Bank of America Upgrades ResMed on Multiple Positive Factors
In a report published Monday, Bank of America analyst Matthew Prior upgraded the rating on ResMed (NYSE: RMD) from Neutral to Buy, and raised the price target from $5.07 to $5.65.
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.
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