ResMed Stock Gains After RBC Capital Upgrade Citing Market Leadership

Shares of ResMed Inc. (NYSE:RMD) climbed 3% on Tuesday after analysts at RBC Capital Markets upgraded the company's stock to Outperform from a previous Sector Perform rating. The firm also raised its price target on the medical device manufacturer to $262 from $244.

Analyst Rationale

The upgrade reflects a positive outlook on ResMed's dominant position in the market for obstructive sleep apnea (OSA) devices. In a note to clients, RBC Capital analyst Craig Wong-Pan highlighted the company's strong growth and potential to benefit from increased global awareness and market penetration for OSA treatments.

RBC pointed to recent strong performance, noting that ResMed's Americas Sleep devices segment grew 8% year-over-year in the fourth quarter of fiscal 2026, outpacing the bank's estimate of mid-single-digit industry growth. The Rest of World Sleep devices business expanded 13% year-over-year in constant currency during the same period.

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Competitive Landscape and Outlook

RBC's analysis projects that ResMed can achieve high single-digit earnings per share (EPS) growth over the next three years. This forecast holds even with the firm's assumption that key competitor Philips Respironics will re-enter the U.S. market in fiscal 2028.

ResMed's growth momentum is also expected to be supported by recent competitor challenges. RBC noted that the U.S. Food and Drug Administration (FDA) recently issued a Class 1 recall for React Health’s Luna G3 device, a development that could further solidify ResMed's market share. The firm also cited ResMed's increased focus on capital management as a positive factor for investors.