RMD – Market expectations are for Uniform ROA to expand, but management may have concerns about growth, product reach, and supply chain challenges
April 11, 2022
- ResMed Inc. (RMD) currently trades above corporate and historical averages relative to Uniform earnings, with a 34.2x Uniform P/E (Fwd. V/E’).
- At these levels, markets are pricing in expectations for Uniform ROA to expand to 69%, accompanied by 3% Uniform asset growth.
- Meanwhile, analysts expect Uniform ROA to improve to 43% in 2023, accompanied by 8% Uniform asset growth.
- If sustained going forward, these levels would imply a stock price closer to $185, representing approximately 25% equity downside for the firm.
