ResMed shares can overcome obesity-drug craze, analysts say

Shares of ResMed Inc. (RMD), which have been pounded in recent weeks by concerns that the obesity-drug craze could hurt demand for the company's sleep therapy devices, are poised for a turnaround, according to Needham analysts. Although GLP-1 drugs, such as Novo Nordisk's (NOVO-B.KO) Ozempic and Wegovy, may cause some patients to stop using CPAP machines as their sleep apnea becomes less severe, "these impacts are likely to be small," the analysts wrote in a note Wednesday, saying that ResMed can sustain 5% to 7% revenue growth and double-digit per-share earnings growth for the next few years. The analysts raised their rating on ResMed shares to buy, from hold, and set a $180 price target for the stock. ResMed shares gained 1% premarket on Wednesday and have dropped 26% in the year to date, while the S&P 500 has gained 17%.

-Eleanor Laise

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09-06-23 0857ET

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