ResMed (NYSE:RMD) Shares Down 6% on Analyst Downgrade

Key Points

• Shares fell about 6% to roughly $201 on Friday after Wells Fargo cut its price target from $270 to $227 and moved to an "equal weight" rating, with trading volume about 30% above average.
• Fundamentals were strong: ResMed beat Q3 estimates ($2.86 EPS vs. $2.79; $1.43B revenue, ~11% y/y), showed margin expansion and declared a $0.60 quarterly dividend, while analysts' consensus remains a "Moderate Buy" with an average target near $285.55.
• Insider selling has occurred recently (including CEO and a director), even as major institutions like First Trust, Norges, Deutsche Bank and Morgan Stanley materially increased positions, leaving about 55% ownership with institutional investors.

ResMed Inc. (NYSE:RMD - Get Free Report) fell 6% during mid-day trading on Friday after Wells Fargo & Company lowered their price target on the stock from $270.00 to $227.00. Wells Fargo & Company currently has an equal weight rating on the stock. ResMed traded as low as $198.64 and last traded at $200.9170. 1,419,680 shares were traded during trading, an increase of 30% from the average session volume of 1,091,651 shares. The stock had previously closed at $213.81.

RMD has been the topic of a number of other reports. KeyCorp dropped their target price on shares of ResMed from $302.00 to $290.00 and set an "overweight" rating on the stock in a report on Monday. Stifel Nicolaus boosted their price target on ResMed from $260.00 to $265.00 and gave the stock a "hold" rating in a research report on Friday, January 30th. Robert W. Baird set a $281.00 price objective on ResMed in a research note on Friday, January 30th. Evercore set a $255.00 price objective on ResMed and gave the company an "outperform" rating in a research report on Monday, April 13th. Finally, Wall Street Zen downgraded ResMed from a "buy" rating to a "hold" rating in a research note on Saturday, March 14th. One research analyst has rated the stock with a Strong Buy rating, nine have given a Buy rating and five have given a Hold rating to the company. According to data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $285.55.

Insider Transactions at ResMed

In other news, Director Peter C. Farrell sold 2,000 shares of the business's stock in a transaction that occurred on Wednesday, April 1st. The stock was sold at an average price of $225.00, for a total transaction of $450,000.00. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link. Also, CEO Michael J. Farrell sold 4,991 shares of the company's stock in a transaction that occurred on Monday, February 9th. The shares were sold at an average price of $273.78, for a total value of $1,366,435.98. Following the completion of the transaction, the chief executive officer directly owned 466,223 shares in the company, valued at $127,642,532.94. The trade was a 1.06% decrease in their position. The SEC filing for this sale provides additional information. In the last quarter, insiders sold 21,023 shares of company stock worth $5,230,857. 0.65% of the stock is owned by company insiders.

Key ResMed News

Here are the key news stories impacting ResMed this week:

• Positive Sentiment: Q3 results beat expectations: ResMed posted $2.86 EPS vs. $2.79 consensus and revenue of $1.43B (up ~11% y/y); gross margins expanded ~290 bps and operating cash flow was strong, with $262M returned to shareholders via buybacks/dividends — a fundamental positive for earnings quality and cash generation. Resmed Inc. Announces Results for the Third Quarter of Fiscal Year 2026
• Positive Sentiment: Margin expansion and operational beats were highlighted across multiple outlets and analyst notes, supporting near-term profitability outlook and the case for continued cash returns. MarketBeat Q3 coverage
• Positive Sentiment: Dividend declared: ResMed announced a $0.60 quarterly dividend (ex-div May 14; pay June 18), supporting yield and income-focused investor interest.
• Neutral Sentiment: Corporate leadership update: CFO Brett Sandercock is retiring and Aaron Bloomer has been named successor — an orderly, preannounced transition that reduces succession risk but adds short‑term uncertainty. Resmed CFO retirement and appointment - GlobeNewswire
• Neutral Sentiment: Analyst and media discussion is focused on whether stronger profits and sleep‑apnea tailwinds materially change ResMed’s investment narrative — useful context but not an immediate catalyst. Did Stronger Profit Forecasts and Sleep Apnea Tailwinds Just Shift ResMed's Investment Narrative?
• Negative Sentiment: Wells Fargo cut its price target sharply from $270 to $227 and moved to an "equal weight" rating — a high-profile downgrade that can pressure stock sentiment and trigger selling from investors who follow that shop. Wells Fargo lowers RMD price target - Benzinga
• Negative Sentiment: Market reaction: multiple reports note the stock fell despite the beat — suggesting profit‑taking, model re‑rating by some investors, and sensitivity to analyst PT changes rather than any fundamental miss. RMD Stock Down Despite Q3 Earnings & Revenue Beat, Margins Rise - Zacks

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. First Trust Advisors LP boosted its position in shares of ResMed by 240.9% in the fourth quarter. First Trust Advisors LP now owns 1,517,592 shares of the medical equipment provider's stock valued at $365,542,000 after acquiring an additional 1,072,394 shares during the period. Norges Bank bought a new position in ResMed during the fourth quarter worth about $249,068,000. Deutsche Bank AG raised its stake in ResMed by 126.0% in the 4th quarter. Deutsche Bank AG now owns 1,413,477 shares of the medical equipment provider's stock worth $340,464,000 after purchasing an additional 787,949 shares in the last quarter. Morgan Stanley raised its stake in ResMed by 25.0% in the 4th quarter. Morgan Stanley now owns 2,891,697 shares of the medical equipment provider's stock worth $696,523,000 after purchasing an additional 578,559 shares in the last quarter. Finally, Swedbank AB boosted its holdings in ResMed by 103.1% in the 4th quarter. Swedbank AB now owns 1,102,476 shares of the medical equipment provider's stock valued at $265,553,000 after purchasing an additional 559,765 shares during the period. 54.98% of the stock is owned by institutional investors and hedge funds.

ResMed Stock Down 5.3%

The stock's fifty day simple moving average is $233.35 and its 200-day simple moving average is $246.69. The stock has a market cap of $29.50 billion, a P/E ratio of 20.03, a P/E/G ratio of 1.40 and a beta of 0.93. The company has a debt-to-equity ratio of 0.06, a quick ratio of 2.32 and a current ratio of 3.06.

ResMed (NYSE:RMD - Get Free Report) last announced its earnings results on Thursday, April 30th. The medical equipment provider reported $2.86 EPS for the quarter, topping the consensus estimate of $2.79 by $0.07. The company had revenue of $1.43 billion for the quarter, compared to analysts' expectations of $1.42 billion. ResMed had a net margin of 27.53% and a return on equity of 25.20%. The business's revenue for the quarter was up 10.8% on a year-over-year basis. During the same period last year, the firm earned $2.37 earnings per share. As a group, research analysts forecast that ResMed Inc. will post 11.05 earnings per share for the current fiscal year.

ResMed Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, June 18th. Shareholders of record on Thursday, May 14th will be issued a $0.60 dividend. The ex-dividend date of this dividend is Thursday, May 14th. This represents a $2.40 annualized dividend and a yield of 1.2%. ResMed's payout ratio is currently 23.74%.

About ResMed

ResMed NYSE: RMD is a global medical device and cloud-connectivity company focused on improving outcomes for people with sleep-disordered breathing and chronic respiratory conditions. Founded in 1989, the company is headquartered in San Diego, California, and develops, manufactures and distributes a range of devices and software used by patients, clinicians and providers worldwide.

ResMed's product portfolio centers on noninvasive ventilation and sleep therapy equipment, including continuous positive airway pressure (CPAP) and bilevel devices, masks and related accessories for the treatment of obstructive sleep apnea and other respiratory disorders.

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