Following ResMed's 1Q results, Morgan Stanley raises its target price to $37.30 from $36.20. The broker assesses very strong device growth driven by price/mix/volume. The Overweight rating is unchanged. Industry view: In-Line.

The 1Q Philips recall benefit was US$80-90m compared to the analyst's estimate for US$25m and was considered the main driver of an EPS beat. Going forward it's felt the recall benefit is less reliant on reduced supply bottlenecks, which increases the broker's conviction.

Sector: Health Care Equipment & Services.

Target price is $37.30.Current Price is $37.17. Difference: $0.13 - (brackets indicate current price is over target). If RMD meets the Morgan Stanley target it will return approximately 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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