RBC Capital downgraded shares of ResMed (NYSE:RMD) to Sector Perform from Outperform in a note Thursday, lowering the price target to $202 from $273 per share.
RBC analysts told investors in a note that the long-term valuation appeals, but the company's minimal EPS growth will limit a near-term re-rating.
"We expect GLP-1 drugs to have only a modest impact on RMD's business, and therefore believe the stock offers long-term valuation appeal," they explained.
"However, our recent channel checks suggest the re-PAP backlog has now been largely addressed, which means RMD's device revenues are most likely to decline between FY24-FY26 as Philips re-enters the new-patient market."
In addition, the analysts said their firm believes RMD's financials are likely to disappoint consensus numbers, while GLP-1 fears are unlikely to be countered in the short term.