UPDATE: Deutsche Bank Downgrades ResMed to Hold, Reiterates $52 PT Following CMS Release

In a report published Thursday, Deutsche Bank analyst David Low downgraded the rating on

from Buy to Hold, but reiterated the $52.00 price target. In the report, Deutsche Bank noted, “The Centers for Medicare & Medicaid Services (CMS) has issued a release to update among other things, details of the roll-out of Competitive Bidding (CB) round 3 and the phase in of special payment rules (i.e. ‘bundled funding'). The changes are set to take place on 1-Jan-15 and CMS is seeking comment on the proposal until 2-Sep-14. While there is the possibility the proposals will be knocked back, if implemented, the near term impact will likely be modest given bundled funding will only to be implemented in 12 areas. However, in the medium term this reform could materially slow mask sales growth if implemented widely (i.e. followed by private payors). We have cut our rating from Buy to Hold following this news and in recognition of the fact the shares are trading near our current price target and valuation. We will review our forecasts when additional detail on the reforms is released.” ResMed closed on Wednesday at $50.50.