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Goldman Sachs tips ResMed share price as a buy

Tom Richardson
healthcare shares

ResMed Inc. (ASX: RMD) shares are marginally lower at $21.48 today, despite the research desk at investment bank Goldman Sachs tipping them as a buy.

The analysts updated their numbers on the sleep therapy giant and reckon the shares have upside of around 11 per cent over the next 12 months. Goldman’s is forecasting three-year compound sales and earnings per share growth of 9% and 12% respectively.

If delivered this would be reasonable performance for a business that has long-term growth potential thanks to its market-leading products and large unmet global addressable markets. 

Goldman’s cites the large markets, favourable pricing dynamics, and new product launches as among the factors influencing its favourable view. 

The analysts’ $24 price target is reached largely by using a multiple of 24.3x EBITDA to enterprise value over the next 12 months. 

The analysts have also slapped a buy rating on CSL Limited (ASX: CSL), but are a ‘sell’ rating on Ramsay Healthcare Limited (ASX: RHC).

The post Goldman Sachs tips ResMed share price as a buy appeared first on Motley Fool Australia.

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Tom Richardson owns shares of CSL Ltd. and ResMed Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended Ramsay Health Care Limited and ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019