Looking to FY22, ResMed is confident in its ability to benefit from a competitor recall and is guiding to a weighted revenue contribution of US$300-350m in the second half of FY22 accordingly. 

It is Morgan Stanley's view that the premium valuation on ResMed will be retained given the competitor recall affecting 30% of the market, a platform launch, and a management team with  long record of execution. 

The company reported fourth quarter revenue of US$876m, a 14% beat on forecasts, driven by a $60-70m benefit from the DS1 recall. 

The Equal-Weight rating is retained and the target price increases to $33.90 from $33.78. Industry view: In-Line.

Sector: Health Care Equipment & Services.

Target price is $33.90.Current Price is $37.27. Difference: ($3.37) - (brackets indicate current price is over target). If RMD meets the Morgan Stanley target it will return approximately -10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2021 Acquisdata Pty Ltd., source FN Arena