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ResMed Stock Rises 3% on RBC Upgrade

Investing.com2 min read6 sources

Why is ResMed stock up today?

ResMed (RMD) stock closed at $229.65, up 3%, on Tuesday after RBC Capital upgraded its rating to Outperform with a $262 price target, citing high-single-digit growth and margin expansion into FY2027.

Key numbers

FY2026 Revenue$5.65B+10% YoY
Q4 FY2026 Non-GAAP EPS$2.95+16% YoY
FY2026 Non-GAAP Gross Margin62.4%+240bps YoY
FY2026 Non-GAAP Operating Margin36.1%+180bps YoY
RBC Price Target$262raised from $244
FY2027 EPS Guidance (Non-GAAP)$12.00–$12.25+7%–10% vs FY2026 actual $11.17

What happened

ResMed (RMD) stock closed at $229.65, up 3%, on Tuesday after RBC Capital upgraded its rating to Outperform with a $262 price target, citing high-single-digit growth and margin expansion into FY2027. RBC raised its recommendation from Sector Perform, arguing that sleep therapy devices — the CPAP masks and breathing machines ResMed makes for people with sleep apnea — keep selling strongly despite a broader market slowdown and rising-rate pressure on tech-style valuations. The upgrade came the same day ResMed's CEO presented at the Morgan Stanley Healthcare Conference in New York, where management guided for FY2027 revenue of $5.75 billion to $5.85 billion and adjusted earnings of $12.00 to $12.25 per share. ResMed's full fiscal 2026 revenue was $5.65 billion, up 10% compared with the prior year, with profit margins expanding for the fourth consecutive year.

Why it matters

ResMed is one of the world's largest makers of CPAP machines and sleep apnea devices, used by tens of millions of patients worldwide. While much of the technology market has taken a double hit — fading AI-spending momentum and rising interest rates compressing valuations — sleep apnea treatment sits outside both pressures because patients cannot put off therapy when markets turn volatile. RBC's upgrade signals that analysts now see ResMed as a rare 'defensive' healthcare tech stock whose revenue stream holds up regardless of the macro cycle, a quality that typically commands a higher valuation when economic growth is uncertain.

Who this affects

Marketbullish
Medium impact
Sleep-device sector gains credibility as a recession-resistant defensive play.
Companybullish
Medium impact
ResMed shareholders benefit as upgrade validates the FY2027 margin-expansion story.
Competitorsbearish
Low impact
Philips faces sharper investor comparisons as RMD's market-share lead widens.
Industrybullish
Low impact
Sleep therapy demand seen as durable through rate pressure and macro uncertainty.

ResMed vs Philips, Inspire Medical

ResMedRMD$32.8B+3.0%19x+10%
PhilipsPHG$24.4B-0.7%13x-1%
Inspire MedicalINSP$2.2B+0.4%55x+4%

As of 2026-09-15

How we got here

  1. Q4 FY2026 results: $1.46B revenue, non-GAAP EPS $2.95 up 16%

  2. RMD falls 5% as slight revenue miss outweighs strong EPS beat

  3. CEO presents FY2027 guidance at Morgan Stanley Healthcare Conference

  4. RBC Capital upgrades RMD to Outperform, raises price target to $262

What to watch

  • MatrixCare divestiture expected to close; watch cash returned to shareholdersQ1 FY2027
  • Q1 FY2027 earnings: first quarterly test of $5.75B–$5.85B annual guidance2026-11
  • Whether other analysts follow RBC and upgrade RMD to a buy ratingQ4 2026

Educational content only. Not investment advice.

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